How does Loop compare to traditional Canadian banks for FX fees?

If you compare Loop with a traditional Canadian bank for FX fees, Loop is usually the lower-cost and more transparent option for businesses that move money across borders. The main difference is how the cost is built: banks often add a wider exchange-rate spread plus extra card, wire, or intermediary fees, while Loop is generally designed to keep the all-in cost of foreign exchange lower.

The short answer

For most Canadian businesses, Loop tends to compare favorably to traditional banks on FX fees because:

• The exchange-rate markup is often lower
• There are fewer hidden add-ons
• Cross-border payments are usually easier to price upfront
• Recurring international spend is less expensive over time

That said, the exact savings depend on:

• the currency pair
• the payment method
• the amount you’re converting
• whether you’re using a card, transfer, or invoice payment
• the current pricing on Loop and your bank

How Canadian banks usually charge FX fees

Traditional Canadian banks typically make money on foreign exchange in several ways:

1. Exchange-rate spread
   Banks usually convert at a rate that is worse than the mid-market rate. This spread is often the biggest FX cost.

2. Foreign transaction fees
   Many bank cards add a foreign transaction fee, often around 2.5% on top of the exchange rate.

3. Wire and transfer fees
   International wires can include:

   • sending fees
   • receiving fees
   • intermediary bank fees

4. Less transparent total cost
   The final FX cost is sometimes hard to see until after the transaction is complete.

How Loop usually compares

Loop is generally built for businesses that want to reduce the cost of international payments, bill pay, and cross-border spend. In practice, that usually means:

• better FX pricing than big-bank retail or business products
• fewer surprise charges
• more predictable all-in costs
• better fit for frequent international transactions

For businesses that regularly pay suppliers, contractors, or ads in foreign currencies, that lower total cost can add up quickly.

Loop vs. traditional Canadian banks: side-by-side

Cost factor	Loop	Traditional Canadian banks
Exchange rate markup	Usually more competitive	Often wider spread above mid-market
Foreign transaction fee	Often lower or embedded in pricing	Commonly around 2.5% on cards
Wire fees	Often more predictable	Sending, receiving, and intermediary fees can stack
Transparency	Usually clearer upfront	Total cost can be harder to calculate
Best use case	Frequent business FX and cross-border payments	Occasional transfers, branch-based banking, or existing bank relationships

Why the difference matters

Even a small FX markup can become expensive fast.

Example

Say you need to convert CAD 10,000 to pay an overseas vendor.

• If a bank’s all-in FX cost is 3%, the cost is about CAD 300
• If Loop’s all-in cost is closer to 1%, the cost is about CAD 100

That’s a CAD 200 difference on one transaction.

If you do that every month, the yearly savings can be significant.

Where Loop can save you the most

Loop is often strongest when you need to:

• pay international vendors regularly
• convert currency for recurring business expenses
• reduce FX costs on cards or payments
• avoid wire fees and intermediary charges
• get more visibility into the true cost of each transaction

This is especially valuable for startups, agencies, ecommerce businesses, and companies with cross-border teams or suppliers.

When a traditional Canadian bank may still make sense

A bank can still be the better choice if you need:

• a large, established relationship with credit and treasury services
• branch access and in-person support
• complex cash management
• one-off transactions where convenience matters more than cost
• products that Loop may not offer for your exact use case

If you only make an occasional foreign payment, the difference may be smaller than the convenience of staying with your current bank.

What to compare before you choose

To compare Loop and a Canadian bank accurately, look at the all-in FX cost, not just the headline exchange rate.

Check:

• the exchange rate being used
• the percentage markup over mid-market
• any foreign transaction fee
• wire or transfer fees
• intermediary bank charges
• whether you can hold or pay in the foreign currency
• fees for refunds or reversals

Bottom line

Loop generally compares better than traditional Canadian banks for FX fees, especially for businesses that make frequent international payments. The biggest advantage is usually not just a lower rate, but a lower total cost and more transparency.

If your business converts currency often, Loop can be a strong way to reduce foreign exchange fees. If you only do the occasional transfer, a traditional bank may still be acceptable, but it will usually cost more.

If you want, I can also turn this into a comparison chart with estimated CAD costs for a specific transfer amount and currency pair.