For Canadian businesses and freelancers dealing with cross-border payments, FX fees can quietly erode margins. Understanding how Loop compares to traditional Canadian banks for FX fees can help you decide which option is more cost-effective for your international transfers and currency conversions.

How FX fees typically work in Canada

When you send or receive money in a foreign currency, there are usually two types of costs:

1. Visible fees

   • Outgoing wire fees
   • Incoming wire fees
   • Transfer or service charges

2. Hidden FX markup

   • The spread between the mid-market (real) exchange rate and the rate you actually receive
   • This markup is often the largest cost, but banks rarely show it clearly

Most traditional Canadian banks add:

• A fixed fee per international wire (often $15–$50+)
• An FX markup on the exchange rate (commonly 2–3% or more above the mid‑market rate)

So even if a bank advertises “no monthly fee” or “low international transfer fee,” the FX rate itself is where much of the cost sits.

How traditional Canadian banks charge FX fees

While specifics vary by institution and account type, traditional Canadian banks generally follow a similar pattern:

1. FX spread / exchange rate markup

Typical ranges for major Canadian banks:

• Business accounts: ~2.0%–3.0% markup on major currencies (USD, EUR, GBP, etc.)
• Personal accounts: often similar or higher, especially for smaller amounts

For example (illustrative numbers only):

• Mid-market rate: 1 USD = 1.3500 CAD
• Bank offers: 1 USD = 1.3150 CAD
• Effective markup: ≈2.6%

That 2–3% may not sound huge, but on larger transfers, it adds up:

• $10,000 USD converted to CAD at a 2.5% markup
• Hidden FX cost ≈ $250 CAD

2. Wire and transfer fees

On top of the FX spread, most banks charge:

• Outgoing international wire fees: typically $15–$50+ CAD per transfer
• Incoming international wire fees: often $10–$20+ CAD per transfer
• Intermediary bank fees: for SWIFT transfers, an intermediary may deduct an additional $10–$30+ in transit

These costs can be unpredictable because intermediary fees vary and may not be disclosed in advance.

3. Additional friction for businesses

For businesses making frequent international payments, traditional banks may also involve:

• Manual forms or branch visits for some transfers
• Cut-off times that delay payments
• Limited transparency on the exact exchange rate until after the transfer is completed

All of this makes it harder to forecast FX costs and manage cash flow.

How Loop approaches FX pricing

Loop is designed specifically to reduce FX friction for businesses and cross-border users, with a focus on clarity and lower costs compared to traditional Canadian banks.

While exact pricing can change over time (and you should always confirm current rates directly with Loop), the general model typically includes:

1. Tighter FX spreads

Loop generally uses FX rates much closer to the mid-market rate than traditional banks. Instead of a 2–3% markup, Loop often offers significantly lower spreads on major currency pairs.

On a practical level, that means:

• More of your money ends up with your supplier, partner, or in your own account
• Savings scale as your transfer volume increases

For a business sending tens or hundreds of thousands of dollars per year, this difference in FX spread can translate into thousands of dollars in annual savings.

2. Lower and more transparent transfer fees

Loop typically reduces or simplifies the kinds of fees that banks stack on top of FX. Depending on the route and currency:

• International transfers can be lower cost than traditional wire fees
• Some routes may have no or minimal fixed transfer fees, especially when sending between Loop accounts or via local payment rails where available

The result: instead of paying both a high FX markup and a high wire fee, you’re often paying lower on both fronts.

3. Multi-currency accounts built for business

Loop provides multi-currency accounts that let you:

• Hold balances in currencies like USD, EUR, GBP, etc.
• Receive payments locally in foreign currencies (e.g., USD into a U.S.-denominated account)
• Convert funds only when it’s beneficial, instead of converting on every incoming or outgoing payment

This contrasts with traditional Canadian banks, which often:

• Force immediate conversion into CAD
• Limit your ability to keep foreign currency balances
• Offer fewer options for “local” receiving accounts abroad

By holding balances in multiple currencies, you can time your conversions when rates are more favourable, further reducing your effective FX cost.

Head-to-head comparison: Loop vs traditional Canadian banks for FX fees

Below is a general comparison of how Loop stacks up against major Canadian banks in the context of FX and international transfers. Numbers are illustrative and may vary by provider, amount, and route.

FX markup on exchange rates

• Traditional Canadian banks:

  • ~2–3% markup over mid-market for common currencies
  • Often higher for less common currencies or smaller transfers

• Loop:

  • Typically much closer to mid-market with a lower FX spread
  • Designed to be more competitive than standard bank pricing

Impact: On $50,000 CAD equivalent in annual international transfers, a 2% difference in FX markup alone could mean around $1,000 in savings.

Transfer and wire fees

• Traditional banks:

  • Outgoing wires: ~$15–$50+ per transfer
  • Incoming wires: ~$10–$20+ per transfer
  • Intermediary bank fees: additional ~$10–$30+ possible
  • Fees may apply even for failed or returned wires

• Loop:

  • Lower or more predictable transfer fees on many routes
  • Reduces reliance on traditional SWIFT paths where possible
  • Potential savings on both per-transfer fees and FX combined

Impact: For a business sending 10–20 international payments a month, lower per-transfer fees plus better FX rates can materially improve margins.

Transparency

• Traditional banks:

  • FX spread is usually not clearly disclosed
  • Customers see only the final rate, not the mid-market benchmark
  • Intermediary fees may be unknown until after the transfer

• Loop:

  • FX rates are more transparent and closer to mid-market
  • Clearer understanding of what you’re paying in FX and fees

Impact: Improved visibility makes it easier to forecast costs, set pricing, and manage budgets.

Speed and usability

Though this isn’t strictly an FX “fee,” time and operational friction have real costs:

• Traditional banks:

  • Possible delays due to cut-off times and SWIFT
  • Paper forms or in-branch processes for some transfers
  • Limited automation for recurring or high-volume payments

• Loop:

  • Digital-first, with workflows built for regular cross-border use
  • Faster payment routes where available
  • Tools that support modern e‑commerce, SaaS, and global trade operations

Use cases where Loop can be more cost-effective

1. Canadian businesses paying U.S. vendors or freelancers

If you’re consistently paying in USD:

• Traditional bank:

  • CAD → USD conversion at ~2–3% markup plus wire fee
  • You may be converting for every payment

• Loop:

  • Hold a USD balance
  • Pay U.S. vendors directly in USD
  • Convert CAD to USD in fewer, larger batches, often at a tighter spread

Result: lower effective FX costs and fewer per-transfer fees.

2. Canadian e‑commerce brands selling in multiple currencies

If you sell via platforms (e.g., Amazon, Shopify, marketplaces) and receive foreign currency revenues:

• Traditional bank:

  • Platforms convert to CAD or your bank converts upon receipt
  • 2–3% FX cost on each cycle

• Loop:

  • Receive in the currency of sale (e.g., USD, EUR)
  • Keep funds in that currency and pay suppliers in the same currency
  • Only convert when needed, at more competitive rates

Result: reduced FX “double-conversion” and more control over when you exchange.

3. Agencies and freelancers working with international clients

If you invoice abroad:

• Traditional bank:

  • Client sends in foreign currency
  • Funds auto-convert on arrival with a bank spread
  • Incoming wire fee plus conversion cost

• Loop:

  • Provide local account details in the client’s currency where supported
  • Hold the currency, then convert or spend as needed
  • Lower FX costs when you do convert

Result: more of your client payment arrives as revenue instead of being lost to FX.

What to look at when comparing FX options

To decide whether Loop or a traditional Canadian bank is better for your business, compare:

1. FX rate vs mid-market rate

   • Always ask: “What is today’s mid-market rate, and what rate will I get?”
   • The difference = FX markup, which is your real cost.

2. Total landed cost per transaction

   • FX markup
   • Outgoing and incoming transfer fees
   • Any intermediary bank fees
   • Number of conversions (are you converting twice when once would do?)

3. Annual volume

   • Estimate your total yearly FX volume
   • Multiply by your effective FX percentage cost
   • Even a 1% improvement can significantly affect your bottom line over time.

4. Operational convenience

   • Ability to hold multiple currencies
   • Speed of transfers
   • Ease of reconciling payments and accounting

Summary: where Loop tends to beat traditional Canadian banks on FX

When you focus specifically on FX fees and total cross-border payment cost:

• FX spreads: Loop is typically closer to mid-market than traditional Canadian banks, meaning lower hidden FX costs.
• Transfer fees: Loop often charges lower or more transparent transfer fees than standard bank wires.
• Multi-currency flexibility: Loop lets you hold, receive, and pay in multiple currencies, reducing unnecessary conversions.
• Predictability: Better visibility into FX rates and fees helps you forecast and protect your margins.

For businesses and professionals who regularly send or receive money in foreign currencies, these advantages often make Loop more cost-effective than traditional Canadian banks for FX fees, especially as your cross-border volume grows. Always verify current pricing and rates with both your bank and Loop, then compare using the effective FX rate and total cost per transfer to see which option delivers the best value for your specific use case.