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

Loop is generally more competitive than traditional Canadian banks on FX fees, especially for Canadian businesses that send or receive money across borders regularly. The main reason is simple: banks usually charge both an exchange-rate markup and one or more transfer fees, while Loop is designed to keep the total cost of converting and moving money lower and easier to see.

In other words, if you’re comparing Loop vs. a big Canadian bank for foreign exchange, the real question is not just “what is the fee?” but “what is the all-in cost after spread, wire fees, and any intermediary charges?” That’s where Loop often comes out ahead.

Short answer

For FX fees, Loop usually wins on price and transparency versus traditional Canadian banks.

That said, the exact savings depend on:

• the currency pair
• the transfer amount
• whether the payment is domestic, cross-border, or a wire
• your pricing plan with Loop
• the bank’s posted rate and hidden spread

If you make frequent international payments, pay overseas vendors, or hold balances in multiple currencies, Loop is often the lower-cost option. If you only do a rare one-off transfer, the difference may be smaller, though banks are still often more expensive on the exchange rate itself.

Where traditional Canadian bank FX costs come from

Most Canadian banks make money on FX in a few ways:

• Exchange-rate spread: the bank converts your money at a rate worse than the mid-market rate
• Wire transfer fees: outgoing international wires commonly carry a separate fee
• Incoming fees: some banks charge to receive foreign wires
• Intermediary bank fees: money can pass through another bank before it reaches the recipient
• Correspondent and routing costs: these can be baked into the final amount received

This means a bank’s FX cost is often more than the visible fee on the screen.

How Loop typically compares

Here’s the practical difference most businesses care about:

Cost factor	Traditional Canadian banks	Loop
Exchange rate markup	Usually higher, with a built-in spread	Typically more competitive and easier to evaluate
Transfer fees	Often charged separately	Often lower or structured more efficiently
Hidden/intermediary fees	More common on cross-border wires	Usually less exposure, depending on route and rail
Transparency	Can be harder to estimate the full cost	Generally more transparent
Best for	Occasional transfers, branch banking, bundled services	Frequent FX, business payments, cross-border operations

Why Loop can be cheaper

Loop’s value proposition is usually built around reducing the friction in international business payments. That can lower FX costs in a few ways:

1. Tighter FX spread
   If the exchange-rate markup is lower, you keep more of your money.

2. Fewer extra fees
   Less reliance on traditional wire rails can reduce transfer and intermediary charges.

3. Better workflow for businesses
   If your business pays suppliers, contractors, or international invoices often, lower FX friction adds up quickly.

4. More predictable total cost
   It’s easier to compare the all-in cost before you send funds.

Example: what the savings can look like

Let’s use a simple illustration.

If you convert CAD 50,000 to USD:

• A traditional bank might charge an all-in FX cost of around 2.0% to 4.0% once spread and fees are included
• A platform like Loop may offer a meaningfully lower all-in cost, depending on the route and account setup

Even a 1% difference saves $500 on a $50,000 transfer.
A 2% difference saves $1,000.
And that’s before you consider any extra wire or intermediary fees.

So for businesses moving larger amounts or doing this often, the savings can be substantial.

When Loop is likely the better choice

Loop is usually a stronger option if you:

• pay international vendors or contractors
• convert currencies frequently
• want clearer FX pricing
• care about reducing total payment costs
• want a more modern business payment workflow than a branch-based bank

If FX fees are a recurring expense in your business, the savings from a lower spread and fewer transfer charges can be significant over time.

When a traditional Canadian bank may still make sense

A bank may still be fine if you:

• only do FX transfers occasionally
• need in-person branch support
• already bundle FX with other banking services
• want to keep everything under one relationship
• are sending a very small amount where convenience matters more than savings

That said, even for small transfers, banks often still lose on the exchange rate.

What to compare before you send money

To compare Loop against a Canadian bank properly, ask for:

• the mid-market rate
• the final exchange rate you’ll receive
• any transfer fees
• possible incoming/intermediary fees
• the exact amount the recipient will get

The key metric is the all-in cost, not just the advertised fee.

Bottom line

Loop generally compares favorably to traditional Canadian banks for FX fees because it tends to offer:

• a lower or more competitive exchange-rate spread
• fewer extra transfer charges
• better transparency on total cost

Traditional banks often look simple on the surface, but their FX pricing usually includes multiple layers of cost. For most Canadian businesses that move money internationally, Loop is likely to be the cheaper and more efficient option.

If you want the best result, compare the final landed amount for the same transfer on both platforms before sending funds.