I am Canadian. Our company is based in Canada. We offer invoicing services to small businesses and home based businesses. Business is good and we are growing fast.
We believe in simplicity. We decided to charge our clients in one currency. If you are going to work internationally with one currency (we have users in 120 countries) the currency you choose is US dollars and I don’t know anyone who would argue that. As a Canadian this raises a number of issues.
1. Oligopoly in banking: Canada has 5 major banks. That’s not much competition. The banks collude to do things that are good for them, not so much for Canadians. For example, to transfer USD funds from our US accounts into our CDN dollar accounts the banks charge us about 1% of the transaction. This is bullshit (pardon my French). For a while now, we have used Custom House to exchange our funds (I have an old friend there named Chris Day. Great service. Call him or me if you need to exchange currency). Custom House takes about 0.1% of the transactions – more reasonable.
2. The Canadian dollar is powerful: Over the past three years, we have seen the Canadian dollar rise from about $0.65 to about $0.90 … we used to get 1.4 CDN for each USD. Now we get about 1.13. This is not as bad for us as I imagine it is for many other Canadian companies because we can pay (and do) some of our major expenses in USD, which isolates us from the change in currency volatility, but as a Canadian business person who collects internationally, it’s a drag to lose the bump we used to get with a weaker dollar.
So, why the rant? I remember when I was in grade four and I started to watch the Dow Jones index. In fact, I tracked stocks for my Dad (remember New York Seltzer? We did great on that one =)) . Back then, I wanted the Canadian dollar to equal the USD. It was a point of principle. Goes to show you should be careful what you wish for…
Anyhow…I know the high value of the Canadian currency is something on the mind David Dodge (governor of the Bank of Canada). I read a piece in the Globe on it last week. Thought I would share my thoughts because I think it is an interesting issue in web services for many companies (and will continue to be) because location does not matter much with web services and therefore you don’t necessarily collect in your own dollar.
P.S. We are releasing a sneak peak of our new company name and logo and website tomorrow. I’ll post something here so be sure to read tomorrow.
“Having lived in both Canada and the US I am amazed by the difference in competitiveness of the financial institutions. Transaction fees are very high in Canada but customer complacency remains high too. I don't get it. Anyway, thanks for the Custom House link, I'll give it a whirl.”
“Thank for commenting Osh…occcurs to me I should add that these guys (Custom House) are geared towards handling larger transaction sizes (i.e. $5000 plus)…that said, it's a great service that is worth a look and by all means ask for Chris Day if you call.”
“I have been running an on demand CRM company called salesboom.com from canada for a long time now, and we see the same type of issues every day. We are lucky that most of our marketing dollars are being paid in US dollar so we dont have to exchange, but we still exchange 30% of our revenues to pay for operations in canada.Also while it might be good for the economy that the Canadian dollar is better valued these days, it is not good for us at all and I imagine not good for any exporter as it increases the cost for international customers.”
The CAN dollar is now worth more that the USA dollar. I never thought that I would see the day. Should be interesting to see how it affects online companies.
I have left Chris Day 16 messages and he has not been able to get back to me as yet. Would appreciate a call back.
Denise – I just saw Chris over the holidays and it turns out he has left currency trading for commercial real estate. I still recommend custom house though and we still do use them…if i were you I’d just call their main line and ask for someone in sales. Sherif (?) is in support and has always been helpful if that’s any help to you.
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I just went to a Toronto Dominion bank in Edmonton to try and change US currency to Canadian currency. They would not do it unless I had an account at that bank which I did not.I find it odd that I could go to any bank in the world and change that currency but not at most banks in Canada.This is not the first time I have experienced problems at Canadian banks exchanging currency. Canadian Banks provide very poor service and over charge you when they will provide the service. Our banking system sucks. Consumer complacency in this country is way to high.
Economy stinks right now. That is for sure.