Money changers left penniless amid border clamp

money-glitz | Staff Reporter 22 Nov 2021

Money changers are being pushed to the brink in Hong Kong as the city remains out of bounds to tourists with its borders firmly closed nearly two years into the Covid pandemic.

A slowing economic recovery in the mainland meanwhile is further denting whatever meager business they currently have, they say.

The number of money changers have nearly halved across districts such as Sheung Shui, Mong Kok and Sham Shui Po. Many have turned into grocery shops or pharmacies, with many other premises left vacant.

Only about half of the 30-odd money changers remain open around Shek Wu Hui in Sheung Shui, says an owner who goes by the name of Chan.

He says his revenues have fallen by nearly 90 percent from their peak in the past.

Money changers in Sheung Shui traditionally make their money from mainland tourists and they've been in a struggle to survive, with the border closed since March last year, Chan says.

Their current revenues mainly come from remittances by mainland firms but this income has also suffered with the China's economy recovering at a slower pace, Chan says.

In Tsim Sha Tsui, meanwhile, money changers too have been hit largely because there are no tourists splashing out on jewelry and other luxury goods.

Industry insiders say the absence of mainlanders since the border closure has greatly impacted jewelry sales.

In addition to Covid curbs, stricter regulations and the rise of online currency exchange services have affected their fortunes in recent years.

The Customs and Excise Department has become more stringent in granting licenses to money service operators amid concerns over criminal activities such as money laundering in recent years.

The number of licenses given to money service operators fell to around 800 in the first 10 months of this year from nearly 1,500 in 2019, according to official data.

Chan admits that the industry's reputation has been harmed by some operators who were lured into money laundering in the past and he believes that the new stringent regulations will help improve the industry's image.

DIGITAL BLOW

Some licensed money changers say that the boom in online currency exchange services has further hit their business, making it more difficult for small and medium-sized shops to survive.

They also complain that money changers have not received any subsidies from the government.

The head of a money changer in Sham Shui Po called Leung, meanwhile, says electronic wallets have taken away some of her customers as the service is considered safe and fast and offers a more favorable exchange rate than a bank's.

Many electronic wallets now have a cross-border remittance functions that can transfer up to 30,000 yuan (HK$36,558) at a time with annual transfer limits as high as 500,000 yuan.

Chan, however, says his shop is less impacted by electronic wallets as his customers are mainly business people in the mainland and Hong Kong, who usually need a large amounts that are beyond online transaction limits.



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