Taiwan post office to launch foreign currency exchange
Chunghwa Post Co. , Taiwan’s sole postal service provider, will launch foreign currency exchange on Dec. 7 in the latest event that marks a convergence of postal and financial services at Taiwan’s post offices.
Starting Dec. 7, 108 branches under Chunghwa Post Co. throughout the island will offer exchange of four foreign currencies — the U. S. dollar, the yen, the euro and the Hong Kong dollar. At the same time, the post offices will sell mutual funds on behalf of local asset management firms.
The expansion of post offices into the banking arena has become an irreversible trend. Even Hsu Jen-shou, chairman of Chunghwa Post Co. , said right now 92 percent of the company’s annual sales of NT$300 billion comes from consumer banking, making it no different from a typical financial holding company.
His statement reflected Chunghwa’s resolve to reform Taiwan’s sole postal service and make operations more diverse. The company’s invitation of Sichuan performers to put on a traditional “face-change” show at the company’s 70th anniversary further demonstrated its commitment to making services more wide-ranging for consumers.
According to analysts, the move to allow currency exchange at post offices would benefit even more consumers as postal offices have more outreach to the community than banks and other financial institutions. Nineteen of the 108 post offices, for example, are located in Taiwan’s various scenic spots — including Chiufen and Wulai (Urai) — frequented by multitudes of international visitors each day who may be inconvenienced by the lack of banks in the area.
But Chunghwa does not want to stop there — it has begun to offer mutual funds on behalf of asset management firms. So far the funds offered at the post offices are: Fuhwa Asset Management’s Household Prosperity Fund, two of Capital Asset Management’s equity-bond funds and JPMorgan Fleming’s Household Stability Fund. Buyers could open an account with a minimum of NT$5,000. The practice is in contrast to what was done in the past, where post offices only helped buyers transfer money to asset management firms.
Huang Yung-cheng, president of Chunghwa, said the company is now considering offering U. S. dollar time deposits if the currency exchange and mutual fund operations proved to be successful. Chunghwa Post Co. has also stepped into the life insurance business by offering several policies.
Most banks say at this stage they do not feel threatened by Chunghwa’s new business strategy as customers, especially those in central and southern Taiwan, are very brand conscious and only trust established banks to make currency exchanges.
Meanwhile, banks say most of them have developed great anti-counterfeit capabilities given the rampancy of fake notes circulating in the market. Post offices have yet to develop such capabilities, banks said.
