Regulation Is the Floor. Local Accounts Are the Advantage.

TL;DR: In Canada, RPAA compliance and CDIC-protected CAD accounts are becoming table stakes. Loop’s edge is true U.S. operating accounts with FDIC insurance and native rails (ACH/wires).

The new baseline in Canada: safety, finally standardized

Canada’s Retail Payment Activities Act (RPAA) brought long-awaited guardrails to payment service providers (PSPs). It places non-bank PSPs under Bank of Canada oversight with a staged rollout. The result: clearer obligations, better supervision, and fewer unknowns for businesses that move money digitally.

As part of this modernization, Loop customers’ CAD balances are held in trust with Canadian banking partners. When eligible deposits are held at a CDIC member institution and properly recorded in trust, CDIC protects up to $100,000 per depositor, per insurance category.

Here’s the reality: most Canadian fintechs can now say something similar. RPAA raised the floor. Safety is good — but sameness isn’t a strategy.

What actually sets Loop apart: real U.S. bank accounts + practical local details abroad

Plenty of providers advertise “multi-currency accounts.” Under the hood, they're just currency accounts – fine for some use cases, but you still feel foreign when you try to collect or pay locally.

Loop is different. We issue real domestic accounts in the markets Canadian companies do business in::

• USD: Real U.S. bank accounts (routing & account numbers) for ACH and wires — FDIC coverage applies through our U.S. banking program, subject to standard limits and categories.
• GBP & EUR: Local account details (U.K. sort code & account number, local IBANs for SEPA) provided via our cross-border payments partner so you can pay and get paid on local rails.

Why that matters

• You get paid like a local. U.S. marketplaces pay by ACH, U.K./EU partners can use Faster Payments/BACS/SEPA — fewer international wires.
• Suppliers treat you like a local. Fewer “international” fees and fewer compliance pauses.
• Cash flow moves faster. Local rails are typically quicker and lower cost than cross-border.
• Clear protections, accurately scoped. CDIC for eligible CAD deposits in trust, FDIC for U.S. operating accounts; safeguarding for GBP/EUR payment accounts.

Bottom line: CDIC secures your CAD balances in trust, FDIC secures your U.S. operating account, and your GBP/EUR are safeguarded.

Quick note: with Loop, you can open a real USD operating account. But for those who simply want to hold USD in a Loop currency wallet, your funds are still CDIC insured.

Quick scenarios: where domestic accounts matter

1. Canadian brand, U.S. customers
2. You sell into the U.S. weekly. With a real USD account, wholesalers pay you by ACH. Funds land domestically under FDIC rules (up to $250,000 per depositor, per insured bank, per ownership category), and you convert only what you need — with Loop’s competitive FX.
3. EU supplier payments, without the friction tax
4. You buy packaging in Italy. With a EUR IBAN, you push SEPA credits like a local — and your supplier stops padding invoices to offset cross-border fees. Funds are safeguarded under RPAA structures, but not insured by an EU deposit scheme.
5. U.K. marketplace payouts
6. Your U.K. sales channel gets a GBP account detail set (sort code + account number). You receive payouts via Faster Payments/BACS. Funds are safeguarded; FSCS deposit insurance does not apply.

Insurance & safeguarding 101

• CAD: When eligible deposits are held at a CDIC member bank and properly recorded in trust, coverage is $100,000 per depositor, per insurance category. RPAA facilitates trust-based structures that allow pass-through coverage to beneficiaries when records are in order.
• USD: FDIC insures up to $250,000 per depositor, per insured bank, per ownership category — applies to Loop U.S. operating accounts opened through our U.S. banking program.
• GBP & EUR: Not covered by FSCS (U.K.) or EU DGS deposit insurance, because these are not U.K./EU bank accounts. They are payment accounts under Loop’s Canadian license, with funds safeguarded in designated accounts — which means funds are kept separate and protected from Loop’s creditors in the unlikely event of Loop’s insolvency. Safeguarding is not the same as deposit insurance.

Important: Eligibility, limits, categories, and the application of coverage depend on the relevant scheme and underlying institutions. This is an informational summary, not legal advice.

What to ask any fintech (including us)

1. Are my foreign-currency accounts truly domestic bank accounts?
2. Do I receive real ACH in the U.S., sort code in the U.K., local IBAN in the EU — and are these bank accounts or payment accounts issued under another jurisdiction?
3. What deposit protection applies, by currency and account type?
4. CDIC for CAD in trust? FDIC for U.S. bank accounts? For GBP/EUR, is it deposit insurance or safeguarding only?
5. How do payments flow end-to-end?
6. Which rails (EFT, ACH, Fedwire, SWIFT, Faster Payments, BACS, SEPA)? What are cut-off times, settlement speeds, and fees?
7. What’s the FX strategy?
8. Can I hold balances and convert on my schedule? Are spreads transparent?

Loop’s point of view

Regulation should secure the floor, not define the ceiling. RPAA/CDIC make the system safer – good for everyone. But operating like a local, especially via FDIC-insured U.S. operating accounts, is what moves revenue, gross margin, and working capital.

That’s why Loop pairs CAD accounts with CDIC coverage (in trust at our partner banks) with true U.S. operating accounts (FDIC-eligible) — and provides GBP/EUR local account details to speed up collections and payouts, backed by safeguarding.

If you export, you shouldn’t feel foreign. With Loop, you don’t.

FAQ

What is the RPAA in Canada?
A federal framework placing non-bank PSPs under Bank of Canada supervision, with staged implementation starting in 2025.

Are Loop CAD accounts CDIC-insured?
Eligible CAD deposits held at CDIC member institutions and properly recorded in trust are protected up to $100,000 per depositor, per insurance category.

Are Loop USD accounts FDIC-insured?
Yes — Loop U.S. operating accounts are provided via FDIC-insured institutions, with coverage up to $250,000 per depositor, per insured bank, per ownership category.

What about GBP and EUR balances?
You get local account details for Faster Payments/BACS (GBP) and SEPA (EUR) to transact like a local. These are payment accounts safeguarded under Loop’s Canadian license.

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Keywords:

RPAA, CDIC insurance, FDIC insurance, safeguarding, ACH, Faster Payments, SEPA, U.S. operating accounts, payment accounts, local account details, Canadian PSP.

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