Rolling in dough: Pressure from external competition by banks has limited industry expansion

The Foreign Currency Exchange Services industry in Canada is expected to flourish over the five years to 2019, as operators expand their service offerings and favourable economic trends boost demand. Pressure from external competition by banks offering foreign exchange services has held back the industry's expansion significantly. Alongside favourable economic trends and the proliferation of online services, operators have expanded the demand pool by extending the reach of their services. The growing number of operators offering online services through platforms has expanded the reach of companies, which has grown the demand pool to the benefit of revenue. However, this trend has increased the level of internal competition...read more.

Industry Statistics & Market Size
Revenue
$307m
Annual Growth 14-19
10.8%
Forecast Growth 19-24
Profit
Employment
1,251
Businesses
132

Industry Threats & Opportunities

  • Heavy external competition from financial institutions is not expected to weaken and will continue to limit revenue growth
  • Online platforms enable a single establishment to reach new demand
  • Geopolitical tensions with China can intensify
  • Industry Report - Starting a New Business Chapter

    The Foreign Currency Exchange Services industry in Canada has medium barriers to entry. While capital investments for the setup of a physical ATM or kiosk and the installation of computing systems are relatively simple, the primary obstacles are regulatory and logistical. Operators in this industry with substantial retail operations are required to protect against foreign exchange fluctuations, especially due to the fact that retail operations often hold large amounts of physical foreign currency. This factor is one of the largest impediments to potential entrants, with many small players unable to obtain large currency holdings and properly hedge against risk at the same time. Con...purchase to read more.

    Additional Insights for the Foreign Currency Exchange Services Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Foreign Currency Exchange Services Industry are

  • Ability to manage stock at hand
  • Proximity to key markets
  • Management of exchange rate risks
  • IBISWorld analysts also discuss how external factors such as Inbound international travel and External competition in the Foreign Currency Exchange Services industry impact industry performance..

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    What's in this report

    What is the Foreign Currency Exchange Services Industry?

    This industry includes operators that offer foreign currency exchange services to consumers and businesses as a primary source of revenue. Industry services include business-to-business payment services and traditional currency exchange. Bank holding companies that do not charge fees for exchange services are not included in the industry, while ATMs are not considered establishments.

    Industry Products
  • Retail banking
  • Online foreign exchange
  • In-store foreign exchange
  • Foreign exchange for businesses
  • Industry Activities
  • Providing foreign currency exchange services for consumers
  • Providing currency exchange services for businesses
  • Providing bulk foreign currency exchange to banks
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Inbound international travel
  • External competition
  • US dollar exchange rate
  • Per capita disposable income

  • Current Performance
  • Diversification of services
  • Commissions and industry structure
  • Chart: Revenue Growth

  • Industry Outlook
  • Unfavourable trends
  • Technology and industry structure
  • Table: Foreign Currency Exchange Services Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Foreign Currency Exchange Services Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Depository Credit Intermediation In Canada
  • Commercial Banking in Canada
  • Consumers in Canada

  • Key Selling Industries
  • Accounting, Tax Preparation, Bookkeeping and Payroll Services In Canada
  • Commercial Banking in Canada
  • Software Publishers In Canada

  • Products & Services
  • Retail banking
  • Foreign exchange for businesses
  • In-store foreign exchange
  • Online foreign exchange
  • Other
  • Chart: Foreign Currency Exchange Services Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Retail
  • Financial institutions
  • Money service businesses
  • Other
  • Chart: Major Market Segmentation for the Foreign Currency Exchange Services Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitWagesPurchasesDepreciationMarketingRentUtilitiesOther costs
  • Chart: Cost Structure Benchmarking – Sector vs Foreign Currency Exchange Services

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Foreign Currency Exchange Services Industry

  • Industry Globalization
    International Currency Exchange Ltd.,
  • Table: International Currency Exchange Ltd. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Foreign Currency Exchange Services Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Foreign Currency Exchange Services Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)
  • Wages (2010-2024)
  • Purchases (2010-2024)
  • Profit (2010-2024)
  • Depreciation (2010-2024)
  • Marketing (2010-2024)
  • Rent (2010-2024)
  • Utilities (2010-2024)
  • Other (2010-2024)
  • Inbound international travel (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Bid-Ask Spread
  • The difference between the price buyers are willing to pay for a currency and the price sellers are willing to sell the currency.
  • Commission Revenue
  • Revenue that comes from buying and then selling currencies.
  • Kiosk
  • Small foreign currency exchange establishments often located in airports.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Foreign Currency Exchange Services market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Foreign Currency Exchange Services:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Foreign Currency Exchange Services market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Foreign Currency Exchange Services, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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