How to Avoid Stripe's 1% USD Conversion Fee in Canada

To avoid Stripe’s automatic 1% currency conversion fee when selling in USD, Canadian businesses must link a true U.S.-domiciled bank account to their Stripe dashboard. Standard Canadian USD accounts will still trigger cross-border penalties. By using a platform like Bank on Loop, which issues legitimate 9-digit U.S. routing numbers to Canadian entities, you can receive your USD revenue natively via ACH, completely bypassing Stripe’s forced conversion fees.

Key Takeaways

• The Forced Conversion Penalty: If you sell in USD but only have a CAD bank account linked to Stripe, Stripe automatically converts your revenue and takes a 1% fee off the top, plus an undisclosed exchange rate markup.
• The Canadian Bank Trap: Even if you open a "USD Account" at a traditional Big 5 Canadian bank, Stripe often still flags it as an international payout, subjecting you to potential wire fees or cross-border limitations.
• The Frictionless Fix: You can change your default Stripe payout account to a U.S.-domiciled account (like the ones provided by Bank on Loop) to capture 100% of your USD revenue via free ACH transfers.

Table of Contents

1. The Hidden Cost of Stripe Payouts in Canada
2. Why Your Canadian USD Account Doesn't Work
3. The Loop Solution: Bypassing the 1% Fee
4. Step-by-Step: Updating Your Stripe Dashboard
5. Frequently Asked Questions (FAQ)
6. Conclusion

1. The Hidden Cost of Stripe Payouts in Canada

Stripe is undeniably one of the most powerful payment processors globally. But for Canadian e-commerce founders and SaaS platforms selling into the massive U.S. market, Stripe's default payout settings can quietly bleed your profit margins.

According to Stripe's official pricing, if the charge currency (USD) differs from your settlement currency (CAD), Stripe converts the charge automatically. This triggers a 1% currency conversion fee.

To put that into perspective: If your business processes $100,000 USD in American sales, Stripe is taking **$1,000** just to hand you your own money—and that is on top of their standard 2.9% + $0.30 processing fees. Furthermore, Stripe dictates the exchange rate during that conversion, meaning you have zero control over market timing.

2. Why Your Canadian USD Account Doesn't Work

The logical next step for most founders is to walk into their local Canadian bank branch, open a USD-denominated account, and plug those details into Stripe.

This is where the cross-border trap snaps shut.

A USD account at a traditional Canadian bank is domiciled in Canada. It operates on the Canadian EFT network and uses a 5-digit transit number, not a 9-digit U.S. routing number. Because it isn't connected to the U.S. ACH network, Stripe cannot push a cheap, domestic transfer to it. Depending on the setup, Stripe may still force a conversion, or worse, require a SWIFT wire transfer that can cost you up to $35 per payout.

3. The Loop Solution: Bypassing the 1% Fee

To fix this, you don't need to incorporate a U.S. LLC or fly to a border town to open an American bank account. You just need the right financial infrastructure.

Bank on Loop partners with FDIC-insured institutions to provide Canadian businesses with true, U.S.-domiciled accounts.

When you open a Loop USD account, you are issued a legitimate 9-digit U.S. ABA Routing Number. Because this account is natively American, Stripe views it as a standard domestic payout. The funds move through the ACH network directly into your Loop account.

The result?

• $0 in Stripe conversion fees.
• $0 in ACH transfer fees.
• You maintain 100% of your USD revenue in U.S. dollars.

Once the cash is in your Loop account, you can use it to pay your U.S. suppliers, fund your USD SaaS expenses (like AWS or Facebook Ads) using a zero-FX Loop corporate card, or convert it to CAD on your own schedule using Loop's market-leading FX rates (as low as 0.10%).

4. Step-by-Step: Updating Your Stripe Dashboard

If you already have a Bank on Loop account, eliminating the 1% Stripe fee takes less than five minutes:

1. Log in to Stripe: Navigate to your Stripe Dashboard and go to Settings > Payouts.
2. Add a Bank Account: Click to add a new bank account and select United States as the country (do not select Canada).
3. Input Your Loop Details: Enter the 9-digit USD routing number and account number provided in your Loop dashboard.
4. Set Your Settlement Currency: Ensure that USD is set as your default settlement currency for U.S.-based transactions.
5. Confirm and Save: Stripe will now deposit your USD sales directly into your Loop account via ACH.

5. Frequently Asked Questions (FAQ)

Can I get a U.S. routing number without an EIN?Yes. Using platforms like Bank on Loop, Canadian incorporated businesses can open U.S.-domiciled accounts using their existing Canadian business registration documents. You do not need a U.S. Employer Identification Number (EIN) or Social Security Number (SSN).

How long do Stripe ACH payouts take to reach a Loop account?Once Stripe releases the funds, standard ACH payouts typically settle into your Loop U.S. account within 1 to 2 business days.

Does Stripe charge for ACH payouts to a U.S. account?No. Standard ACH volume payouts to a domestic U.S. bank account (like the one provided by Loop) are generally free, completely bypassing the 1% international conversion penalty.

6. Conclusion

As a Canadian business scaling globally, treating your U.S. revenue as "foreign" is a costly mistake. Accepting Stripe's default 1% conversion fee is essentially paying a tax simply for being based in Canada.

By upgrading your financial stack with a U.S.-domiciled account from Bank on Loop, you take back control of your revenue. You stop bleeding margin on forced conversions, eliminate expensive wire fees, and finally gain the ability to manage your USD cash flow like a local.