Amoney changer is a person or organization whose business is the exchange ofcoins orcurrency of one country for that of another.[1] This trade was a predecessor of modernbanking.[2]
The advent ofpaper money in the mid-17th century and the development ofmodern banking andfloating exchange rates in the 20th century allowed acurrency exchange market to develop. This provided a way for banks and other specialist financial companies such asbureaux de change and other similar financial entities to easily change one country's money for another, and with the added confidence oftransparency.
In ancient times inJerusalem, pilgrims visiting theJewish Temple onJewish Holy Days would change some of their money from the standardGreek andRoman currency forJewish andTyrian money, the latter two the only currencies accepted as payments inside the Temple.[3][4] With this Temple money the pilgrim would purchase a sacrificial animal, usually a pigeon or a lamb, in preparation for the following day's events.
During theMiddle Ages inEurope, many cities and towns issued their own coins, often carrying the face of a ruler, such as the regional baron or bishop. When outsiders, especially travelingmerchants, visited towns for a market fair, it became necessary to exchange foreign coins to local ones at local money changers. Money changers would assess a foreign coin for its type,wear and tear, andvalidity, then accept it as deposit, recording its value in localcurrency. The merchant could then withdraw the money in local currency to conduct trade or, more likely, keep it deposited: the money changer would act as aclearing facility.
As the size and operations of money changers grew they began to provide a lending facility, by adding the lending-fee to the foreign exchange rates. Later theKnights Templar provided this service to pilgrims traveling to and from theHoly Land.[5][6]
