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Cross-border payments look simple from the outside. You send money in one currency, someone receives it in another, and the job is done. But in reality, global payments come with a long list of hidden costs that quietly reduce your margins. Most founders assume they are losing a few dollars here and there. The truth is the total impact can reach thousands of dollars a year without anyone noticing.
Here is what is actually happening underneath each international transfer and what global businesses can do to avoid unnecessary losses.
1. The FX Spread That No One Shows You
Many financial institutions advertise a small conversion fee, but that is not where the real cost lives. The true expense is in the difference between the mid-market rate and the rate you are offered. This gap is known as the spread, and it is almost never shown directly.
For many global businesses, the spread can add two to four percent to every transaction. Once foreign revenue grows, this becomes a significant margin leak.
💡How Loop helps you avoid it?
Loop gives you access to transparent mid-market FX and lets you convert only when it makes sense for your business. With a multi-currency account built for Canadian operators, you can hold USD, EUR and GBP directly instead of converting every transaction.
2. Wire Fees Across Borders
International wires almost always involve several layers of fees. There is usually a cost to send the wire, a cost for the recipient to receive it, and sometimes an unexpected deduction from one or more correspondent banks along the path.
These fees appear small in isolation, but they add up quickly for businesses that operate globally.
💡How Loop helps you avoid it?
Loop lets you send and receive USD, EUR and GBP using local payment rails like ACH, SEPA and Faster Payments, which are faster and significantly cheaper than international wires.
3. Automatic Conversions You Never Approved
Many traditional banks and platforms automatically convert incoming foreign currency into your home currency. This happens with many currencies including USD, EUR, GBP and others.
This creates several problems:
- You lose control over when conversion happens
- You often convert back again later and lose money both times
- Your margins change depending on currency timing instead of business performance
💡How Loop helps you avoid it?
Loop lets you receive, hold and spend each currency on its own without forced conversion. You decide when to convert based on rates, cash flow, or upcoming obligations.
4. Platform Fees From Global Marketplaces and Payment Processors
If you sell internationally or get paid through global platforms, you will encounter a variety of currency fees. Different platforms charge different amounts, but the pattern is the same: Platforms usually convert currencies at their own rates and keep the spread.
Examples include payout conversions, cross-border fees and additional processing charges when payments originate outside the home region.
💡How Loop helps you avoid it?
Loop allows payouts from many platforms to land directly into a dedicated multi-currency balance, preventing platforms from converting on your behalf and preserving your margins.
5. Slow Settlement Times That Affect Cash Flow
Cross-border transfers often take days to settle because several banks are involved and each institution follows different processing schedules, cut-off times and compliance rules. Transfers may be delayed due to reviews, intermediary routing or local banking holidays in different regions. These delays impact cash flow, inventory cycles, advertising budgets and operational planning.
💡How Loop helps you avoid it?
Loop uses local clearing systems whenever possible, which means your USD, EUR and GBP transfers settle faster and more predictably, helping you to reduce operational drag.
6. Accounting Friction When Multiple Currencies Meet Your Books
Companies that operate globally often run into problems in their accounting systems. These issues can include different conversion rates being used by banks and accounting software, mismatched timestamps, or revenue collected in one currency while expenses come in another. This complicates reconciliation and creates inaccuracies in financial reporting.
💡How Loop helps you avoid it?
Loop keeps each currency in a clean, separate ledger and integrates directly with accounting tools so reconciliation stays simple and accurate.
7. The Opportunity Cost Hidden Inside Cross-Border Payments
The biggest cost is not always the spread or the banking fee. It is the operational drag that comes from slow settlement, unpredictable timing and limited visibility. When your payments lag, everything else slows with them. You might wait longer for inventory, lose negotiating leverage with suppliers, delay campaigns or miss opportunities to expand into new markets.
This kind of friction does not show up on a statement, but it impacts growth more than any individual fee.
💡How Loop helps you avoid it?
Loop gives you full visibility across currencies with a real-time multi-currency dashboard, helping you plan ahead and move money intentionally.
How Loop Simplifies Global Money Movement
Cross-border payments should support your business, not slow it down. Loop gives Canadian companies the ability to move money between currencies and markets with clarity, speed and control. With multi-currency accounts, local payment rails, transparent FX and real-time visibility, Loop removes the hidden friction behind global payments and lets your team operate confidently across borders.
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