More than 9,000 fin-tech companies operate in Vancouver, BC, Canada’s westernmost province. Some have benefited from the lower Canadian dollar while others have been hurt. Some, like mobile money transform platform nTrust, have experienced a bit of both.
First the bad news. After being on par with the US dollar in 2013, the loonie is now worth 76 cents. Canadians have less money to send overall.
Canadian firms with American infrastructure and marketing channels are seeing impacts of as much as 40 percent on their operational budgets.
There is a good side too. Firms reducing costs through technology are attracting cost-conscious consumers wary of paying higher fees with their lower dollar. Export-oriented firms enjoy a boost from clients paying in US dollars.
Firms seeking investment also benefit from the lower dollar, as American investors get more value from Canadian companies who can keep their costs down at home while earning revenue in the United States.
“It’s interesting to see the varying degree of impact across just one industry,” said Rod Hsu, president of nTrust. “With so many young companies trying to navigate the drop, the long-term impact is unknown. For many like nTrust, the goal and the struggle is to benefit from the positive while ensuring rising operating costs don’t negatively translate to the customers.”