In recent decades, globalization has spread at an exponential rate and provided businesses with increased opportunities to do business abroad. However, some recent uncertainty in the global market presents a new challenge for Canadian companies that what to expand overseas. These challenges include identifying target markets, logistics management in relation to international expansion and cross-border payment transfers.
“For several businesses, managing international payments is a challenge. At American Express, we understand the complexity of doing business worldwide. We are committed to providing solutions to our customers’ problems to help them streamline their international payments so that they can focus their energy on growth,” asserts Guillermo Brenes, Vice President and General Manager of Payments at American Express.
Canadian companies remain confident despite some concern
A survey commissioned by American Express revealed Canadian financial leaders’ perceptions of international trade. It found that:
- 89% of financial decision-makers in Canada (9 in 10) consider international trade to be important for the success of their business;
- 85% of financial executives believe that opportunities to do business outside of Canada are on the rise, and more than half of them (51%) affirm that they plan to boost international trade over the next 12 months;
- 82% of respondents estimate that their business would lose its competitive edge if international trade barriers increased, while 76% estimate that these barriers would dramatically impact their organization’s performance.
The United States and Europe offer the greatest opportunities for Canadian businesses
In partnership with the Centre for Economic and Business Research (CEBR), American Express identified the most attractive untapped markets for Canadian businesses using variables such as economic performance, regional trade agreements, business environment and ease of doing business.
The results showed that the United States ranked first on the list of markets that Canadian companies should take interest in to foster their growth. Considering its geographic location, size and close cultural ties with Canada, this was far from surprising. The analysis also revealed significant growth possibilities in Europe, with France and Luxembourg ranking second and third respectively for their strong untapped potential.
New technology helps to overcome payment challenges
Despite the significant growth opportunities that international trade provides, operating a cross-border business doesn’t happen without some key challenges, especially when it comes to payments. In fact:
- 78% of businesses that responded to the survey think that it is increasingly complicated for a Canadian company to do business abroad;
- There are three main challenges that impact Canadian companies’ ongoing business operations, namely exchange rate volatility (36%), changes and fluctuations in the economy (31%) and tariffs (24%).
Furthermore, while just under three quarters (71%) of businesses affirm that making or receiving payments from their overseas partners is complicated, almost all of them (92%) believe that new digital technology is making it easier to do business. For example, new technology like blockchain is contributing to the development of international trade by making cross-border payments easier and faster than ever.
“Lightspeed is a high-growth business. This growth has enabled us to forge strategic relationships with international suppliers who meet our needs,” asserts Asha Bakshani, Vice President, Finance, at Lightspeed, a Quebec-based POS and e-commerce solutions provider. “Our success is based on our ability to be more effective in terms of cross-border payments. We were able to achieve this by using appropriate financial tools,” she adds.
Today, savvy businesses invest the time required to plan their international operations strategically and sustainably. As a result, they are able to seize international business opportunities that may arise in the future.
For more information, visit: https://business.americanexpress.com/ca/payment-solutions
This article was originally published by American Express Canada on Les Affaires on January 23, 2019. Service de contenu Les Affaires. Find it here
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.