nTrust

nTrust

March 01, 2016 09:00 ET

Impact of Low Canadian Dollar on Vancouver Tech Sector Varies

Technology companies feel both boom and bust of weak Canadian dollar

VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 1, 2016) - The downward spiral of the Canadian dollar has had varying implications for consumers, businesses, and investors in recent months, with some feeling the negative impact of decreased purchasing power of products priced in U.S. dollars, and others profiting from the now competitive cost of Canadian goods.

While manufacturing, imports and exports, and tourism are among industries in Vancouver traditionally impacted with a clear-cut negative or positive results, the burgeoning tech sector, which accounts for over 9,000 companies in the city, has diverged, with many businesses feeling the negative effects of a weak Canadian dollar while others reap its benefits, and some experiencing both.

One local example, nTrust, a Vancouver-based FinTech firm that helps people send money locally and abroad, has felt both the negative and positive effects of the dropping loonie across several aspects of their business:

  • Customer impact - the poor Canadian exchange greatly impacts how people send money overseas, with many having to work harder to send the same amount. While users are still sending money abroad to assist recipients with education, medical and food bills, they are sending less as a result of the disparity. Conversely, the low exchange has made consumers extra critical and avoidant of excess service fees and charges, giving nTrust, who offer international money transfers from Canada at no-charge, a competitive edge against traditional money-transfer services and ultimately helping the company attract new users.
  • Operating costs - partnerships with and compliance among various U.S.-owned infrastructure and marketing channels that charge in U.S. dollars have impacted operational budgets by as much as 40%.

Others with a large U.S. customer base have taken advantage of the uplift, realizing a boost in revenues from those paying in U.S. dollars. Similarly, firms seeking U.S. investment have benefitted, with American venture capital investors showing an escalating interest in budding Canadian tech start-ups. By generating revenue and investment in the U.S. but keeping operating costs low at home, a growing number of technology companies are benefitting from the dip.

"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."

About nTrust

nTrust is a rapidly growing online and mobile money transfer platform that helps people around the world instantly move and access their money. Using nTrust, members can send money to friends, cash out to their bank account, spend money through their phone, or load funds to a prepaid card to use anywhere the MasterCard® Acceptance Mark is displayed, online or in-person. nTrust's proprietary technology uses the highest encryption standards and is "PCI-DSS Level 1" certified, which remains the top global standard for operational and technical security designed by Visa, MasterCard®, and American Express.

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