How Canadian retailers expand into the U.S. without adding overhead

Expanding into the U.S. market represents a massive opportunity for Canadian retailers. The U.S. is the richest country in the world, with its GDP making up 15% of the global economy ¹. Yet for many Canadian businesses, the dream of U.S. expansion quickly turns into a nightmare of complex financial operations, hidden fees, and administrative burden.

The challenge isn't just about selling products across the border – it's about managing the intricate web of cross-border payments, currency conversions, and financial operations without drowning in overhead costs. International transfers are expected to increase five percent per year until 2027 ², making efficient cross-border financial management more critical than ever.

The hidden costs of traditional U.S. expansion

When Canadian retailers first consider U.S. expansion, they often underestimate the financial complexity involved. Traditional approaches typically require setting up U.S. subsidiaries, opening multiple accounts, and managing separate financial systems – all of which add significant overhead.

Currency conversion challenges

The currency conversion trap catches many businesses off guard. Major Canadian financial institutions charge substantial fees for currency conversion. TD Bank charges 2.6% on foreign exchange transactions, while CIBC charges as much as 3.3% ³. These fees quickly erode profit margins, especially for businesses processing high volumes of transactions.

Consider a Canadian retailer processing $1 million USD in annual sales. At traditional conversion rates, they could lose $26,000 to $33,000 annually just on currency conversion fees. That's money that could be invested in inventory, marketing, or growth initiatives.

Payment processing complications

According to data analytics company LexisNexis, up to 50 percent of payments that don't complete or are delayed are due to simple data entry problems such as incorrectly typing the bank name and address, or getting the account numbers, IBAN or Swift BIC codes wrong ². This creates additional administrative burden and potential revenue loss from failed transactions.

The Canada payments market size reached 22.8 billion transactions in 2024, with expectations to reach 38.7 billion transactions by 2033 ⁴. As transaction volumes grow, inefficient payment processing becomes an increasingly expensive problem.

The impact of current trade dynamics

Recent trade developments have added another layer of complexity for Canadian retailers. On March 4, 2025, President Trump imposed 25 percent tariffs on most imported goods from Mexico and Canada, excluding energy ⁵. While these tariffs primarily affect physical goods, they create uncertainty that impacts all aspects of cross-border business.

Trade accounts for 73 percent of Canada's GDP, with the majority of exports and imports directed toward or coming from the U.S. ⁵. This interdependence makes efficient cross-border financial operations essential for Canadian retailers.

The export sector supported over 3.6 million jobs in the Canadian economy in 2022, of which 2.4 million jobs are directly linked to exports to the United States ⁵. Canadian retailers expanding into the U.S. aren't just pursuing growth – they're participating in a vital economic relationship.

Modern solutions for cross-border expansion

Forward-thinking Canadian retailers are discovering that expansion doesn't require traditional overhead. Modern financial technology enables businesses to operate in multiple markets without the complexity of traditional approaches.

Multi-currency accounts eliminate conversion losses

Airwallex offers multi-currency accounts that allow businesses to receive funds in local currencies without immediate conversion ⁶. This means Canadian retailers can collect USD from American customers, hold those funds, and pay U.S. suppliers without converting currencies multiple times.

The Airwallex Global Account empowers businesses to enhance their financial operations on the international stage, providing a modern alternative to traditional business accounts ⁷. Businesses can open domestic and foreign currency accounts in minutes, dramatically reducing the time and complexity of U.S. market entry.

Streamlined payment processing

Modern payment infrastructure has evolved significantly. 89 percent of payments that flow through the Swift network arrive at the destination bank within an hour, with half making it all the way to the beneficiary account in less than five minutes ². This speed enables Canadian retailers to operate with the same efficiency as their U.S.-based competitors.

Airwallex offers high-speed international transfers, multi-currency company cards, automated accounts payable management, and conversion-optimized payment forms ⁶. These tools eliminate the need for separate U.S. financial infrastructure while providing superior functionality.

Real-world success stories

McLaren Racing modernized cross-border payments with Airwallex, demonstrating how even complex international operations can be streamlined ¹. Similarly, RYSE transformed complex cross-border finances into streamlined, cost-saving, and efficient global operations with Airwallex ⁶.

These success stories highlight a crucial point: the right financial infrastructure doesn't just reduce costs – it enables growth that wouldn't otherwise be possible.

The technology advantage

The global fintech market is expected to grow at a CAGR of 15.1% between 2025 and 2032 ⁸. This growth is driven by innovations that make cross-border operations more accessible and efficient.

Airwallex was established in Melbourne in 2015 and has raised over US$900 million in funding, currently valued at over US$5.6 billion ⁹. The company is supported by major investors including Sequoia, Lone Pine, Greenoaks, DST Global, Tencent, Hillhouse, Salesforce Ventures and MasterCard ⁹.

Integration capabilities

Modern financial platforms integrate seamlessly with existing business systems. Airwallex offers integrations with eCommerce platforms and no-code payment acceptance options ⁶. This means Canadian retailers can maintain their existing operational workflows while adding U.S. market capabilities.

In 2023, there were around 27 million eCommerce users in Canada, accounting for 75% of the Canadian population ⁴. These businesses need solutions that scale with their growth without requiring constant infrastructure investment.

Managing currency risk without complexity

Currency fluctuations can have a significant impact on the cost of international trade ¹⁰. Traditional hedging approaches require substantial credit facilities and complex documentation that many growing retailers can't access.

Airwallex provides interbank FX rates and currency management tools that were previously only available to large enterprises ⁶. This democratization of financial tools enables smaller retailers to compete effectively in international markets.

The compliance advantage

195 countries all have their own payments systems, regulations, and levels of technological maturity ². Navigating U.S. financial regulations while maintaining Canadian compliance creates significant overhead for businesses managing expansion independently.

Modern financial platforms handle compliance requirements automatically, ensuring transactions meet regulatory requirements in both countries. This eliminates the need for dedicated compliance staff or expensive consultants.

Scaling without boundaries

The traditional model of international expansion – with its requirements for local entities, multiple accounts, and separate financial systems – no longer makes sense for most Canadian retailers. Modern financial infrastructure enables businesses to test U.S. markets with minimal investment and scale operations based on actual demand.

Airwallex offers programmatic account creation and onboarding, allowing businesses to automate financial operations as they grow ⁶. This means retailers can focus on customer acquisition and product development rather than financial administration.

Employee expense management

Expanding into the U.S. often requires employees to travel or work across borders. Airwallex provides multi-currency employee cards and expense management tools that simplify cross-border operations ⁶. Employees can spend in local currencies without worrying about reimbursement complexities.

The competitive imperative

Canadian imports make up only 13 percent of total U.S. imports ⁵, indicating significant room for growth. Canadian retailers who efficiently manage cross-border operations can capture a larger share of the massive U.S. market.

Real-time payments systems are expected to generate $173 billion in additional economic output by 2026 ². Businesses using modern payment infrastructure can participate in this growth while those relying on traditional methods risk being left behind.

Implementation strategy

Successful U.S. expansion requires a strategic approach to financial operations. Here's how Canadian retailers can minimize overhead while maximizing opportunity:

Start with payment infrastructure

Before launching U.S. operations, establish proper payment infrastructure. Open multi-currency accounts that can receive USD payments directly. This eliminates conversion costs on incoming revenue and provides flexibility for managing currency exposure.

Automate financial workflows

Use automated accounts payable and receivable systems to reduce manual processing. Airwallex offers automated accounts payable management that streamlines vendor payments across borders ⁶.

Monitor and optimize

Track conversion costs, payment processing fees, and transaction success rates. Modern platforms provide detailed analytics that help identify optimization opportunities. Small improvements in conversion rates or fee reduction can significantly impact profitability.

The path forward

Canadian retailers no longer need to choose between U.S. expansion and operational efficiency. Modern financial infrastructure enables businesses to operate globally while maintaining lean operations.

The combination of multi-currency accounts, automated payment processing, and integrated expense management eliminates traditional expansion overhead. Businesses can test U.S. markets, scale based on demand, and maintain profitability throughout the growth journey.

As international commerce continues to evolve, the ability to operate efficiently across borders becomes a competitive necessity rather than a luxury. Canadian retailers who embrace modern financial infrastructure position themselves for sustainable growth in the world's largest consumer market.

The question isn't whether to expand into the U.S. – it's how to do so without the traditional overhead that has held back so many businesses. With solutions like Airwallex, that barrier no longer exists. Canadian retailers can now compete on equal footing with their U.S. counterparts while maintaining the operational efficiency that drives profitability.

Take the first step toward efficient U.S. expansion. Explore how modern financial infrastructure can transform your cross-border operations without adding overhead. The U.S. market is waiting – and now you have the tools to capture it.

FAQ

What are the main financial challenges Canadian retailers face when expanding to the U.S.?

Canadian retailers typically face currency conversion losses, complex payment processing systems, and high overhead costs from traditional banking infrastructure. These challenges can significantly impact profit margins and operational efficiency when entering the U.S. market.

How can modern financial infrastructure help Canadian businesses avoid conversion losses?

Modern financial platforms like Airwallex eliminate currency conversion losses by providing multi-currency accounts and competitive exchange rates. This allows Canadian retailers to hold USD directly and avoid the "conversion trap" that traditional banks create with hidden fees and poor exchange rates.

What payment processing advantages do Canadian retailers gain when expanding to the U.S.?

Advanced payment solutions streamline cross-border operations by supporting multiple payment methods, reducing transaction fees, and providing faster settlement times. Companies like Argyle Payments offer specialized solutions for retail and e-commerce sectors, including support for various product verticals.

How do cross-border payment trends affect Canadian retailers expanding to the U.S.?

International transfers are expected to increase 5% annually until 2027, with 84% of payments now having direct processing or just one intermediary. This modernization trend benefits Canadian retailers by providing more efficient and cost-effective payment processing options for U.S. expansion.

What impact do recent tariffs have on Canadian retailers expanding to the U.S.?

Recent 25% tariffs imposed on most Canadian goods (excluding energy) in March 2025 have created new challenges for Canadian retailers. However, efficient financial infrastructure becomes even more critical to maintain competitiveness by minimizing operational costs and currency-related expenses.

How can Canadian businesses choose the right financial infrastructure for U.S. expansion?

Canadian businesses should compare business bank accounts and financial solutions that offer multi-currency capabilities, competitive exchange rates, and streamlined cross-border operations. According to Airwallex's expansion guide, the key is finding platforms that eliminate traditional overhead while providing comprehensive financial services for international growth.

Citations

1. https://www.airwallex.com/ca/blog/a-canadian-business-owners-guide-to-successful-expansion

2. https://www.jpmorgan.com/payments/payments-unbound/volume-3/cross-border-payment-modernization

3. https://currencyexchangemississauga.com/best-currency-exchange-rate-in-mississauga/

4. https://www.imarcgroup.com/canada-payments-market

5. https://jacobin.com/2025/03/trump-tariffs-canada-us-imperialism

6. https://www.airwallex.com/ca/blog/ecommerce-businesses-navigate-trade-realities

7. https://www.airwallex.com/ca/blog/what-is-an-airwallex-global-account

8. https://www.marketsandata.com/industry-reports/fintech-market

9. https://londontechweek.com/speakers/jack-zhang

10. https://www.claconnect.com/en/resources/articles/25/the-impact-of-trumps-tariffs-a-comprehensive-analysis