For Canadian businesses, growth doesn’t stop at the border. Whether you’re selling to U.S. customers, sourcing materials overseas, or building global partnerships, the challenge is always the same: how to move money across borders without losing time and profit.
Cross-border payments are essential in 2025, but they’re rarely simple. Between exchange rates, hidden fees, settlement delays, and compliance rules, merchants often discover that international transactions carry more friction than expected. The good news? With the right setup, you can accept and send payments across borders securely, efficiently, and even turn them into a competitive advantage.
In this guide, we’ll cover how cross-border payments work, what your options are as a Canadian merchant, what they cost, and how to keep those costs down.
What Are Cross-Border Payments?
A cross-border payment is any transaction where the payer and payee are located in different countries. For Canadian businesses, this usually means:
- Accepting payments from U.S. or international customers.
- Paying international suppliers, contractors, or software providers.
- Managing expenses in foreign currencies.
Unlike domestic payments, cross-border transactions almost always involve currency conversion and multiple intermediaries (banks, card networks, processors). That extra complexity translates into higher fees, slower settlement, and greater compliance requirements than local transactions.
Why Cross-Border Payments Matter in 2025
Globalization is no longer reserved for large enterprises. Today, even small Canadian businesses operate internationally:
- E-commerce is borderless. A store in Calgary can receive as many orders from Spain as from Canada.
- Services are global. Canadian professionals sell digital products, consulting, or subscriptions to customers abroad while paying for international software and platforms.
- Supply chains are international. Retailers source inventory from the U.S., Europe, or Asia, even if their storefronts are local.
Put simply: ignoring cross-border payments isn’t an option. Customers expect to pay in their own currency, and suppliers expect fast, reliable transfers.
The Challenges Merchants Face
Before diving into solutions, let’s acknowledge the most common hurdles Canadian businesses encounter with international payments:
1. High Fees
Banks and processors apply charges for foreign exchange, wire transfers, and “cross-border assessment fees.” These add up quickly and eat into profit margins.
2. Currency Conversion
Exchange rates fluctuate constantly. Even a small difference in conversion can turn a profitable order into a loss.
3. Settlement Delays
Domestic card payments often settle in 1-2 business days. Cross-border transactions can take 3-7 days depending on the method and institutions involved.
4. Customer Confusion
Shoppers sometimes see unexpected foreign transaction fees on their credit card statements. This creates friction at checkout and can lead to disputes or chargebacks.
5. Compliance and Fraud Risk
International transactions are higher risk for fraud and subject to additional scrutiny from regulators. Merchants must meet anti-money laundering (AML) and card security standards, adding administrative overhead.
How Canadian Businesses Can Accept Cross-Border Payments
There’s no single “best” method for every situation. The right choice depends on your transaction size, frequency, and customer expectations. Here are the most common approaches:
1. Credit Cards (Visa, Mastercard, Amex)
The simplest way to accept payments from international customers is through card networks. The processor manages the currency conversion.
Pros:
- Familiar and seamless for customers.
- Widely trusted and accepted.
- Fast authorization.
Cons:
- Extra cross-border assessment fees (≈0.4–1%).
- Currency conversion costs layered on top.
- Settlement may be slower than domestic.
Best for: Retail and e-commerce businesses that need frictionless checkout for international shoppers.
2. Bank Wires
Traditional bank-to-bank transfers remain popular for large B2B payments.
Pros:
- Highly secure and traceable.
- Suitable for high-ticket transactions.
Cons:
- Expensive: $15-$40 per wire (sending), plus potential receiving fees.
- Slow: 2-5 business days is typical.
- Manual: customers must initiate payment.
Best for: High-value B2B transactions where both parties prefer direct transfers.
3. ACH and EFT
ACH (Automated Clearing House) in the U.S. and EFT in Canada allow businesses to debit customer accounts directly.
Pros:
- Lower cost than wires.
- Reliable for recurring payments.
Cons:
- Requires additional setup and compliance.
- Slower settlement times (3-5 days).
Best for: Subscriptions, memberships, and recurring invoices.
4. Payment Processors with Multi-Currency Support
Some platforms or specialized processors let customers pay in their local currency.
Pros:
- Customer-friendly: pay in their own currency.
- Simplifies conversion on the back end.
- Built-in fraud tools.
Cons:
- Often the most expensive (2.9-3.9% + conversion).
- Longer settlement to your Canadian bank account.
- More complex dispute/chargeback process.
Best for: E-commerce stores serving multiple international markets.
5. Local or Multi-Currency Accounts
Some businesses open U.S. accounts within a Canadian-domiciled bank to accept USD directly.
Pros:
- Avoid unnecessary conversion until you choose.
- Lower FX costs.
- Convenient if you also have U.S. expenses.
Cons:
- More admin overhead.
- May require U.S. tax considerations.
- Not always accessible to every business.
Best for: Businesses with frequent USD transactions, such as import/export or U.S. client bases.
What Do Cross-Border Payments Cost?
Costs vary widely, but here’s what Canadian businesses can expect:
- Credit Card Cross-Border Fees: 0.4-1% of the transaction value.
- Currency Conversion: 2-3% above the mid-market rate.
- Wire Transfers: $15-$40 per transfer (sending) + possible receiving fees.
- Payment Facilitators: 2.9-3.9% + $0.30 per transaction, sometimes higher for international cards.
- Fintech Multi-Currency Accounts: Typically 0.5-1% above the mid-market rate.
On a $1,000 U.S. order, you could easily lose $50 or more in fees before the funds hit your account.
How to Keep Costs Down
Managing costs is less about eliminating fees entirely and more about matching the right tool to the right transaction.
- Choose strategically. Don’t use PayPal for $50,000 supplier payments, and don’t use a bank wire for a $20 online order.
- Leverage multi-currency accounts. Holding USD until you need it avoids unnecessary conversions.
- Be transparent with customers. Display the payment currency clearly at checkout to prevent disputes.
Compliance Considerations
Cross-border payments also mean playing by international rules. Depending on your markets, you may need to comply with:
- AML (Anti-Money Laundering) checks for larger transfers.
- PCI DSS standards for processing credit card data.
- Sanctions and export controls if doing business in restricted regions.
A strong payments partner will help you stay compliant without slowing down your transactions.
Growing Across Borders
Cross-border payments are no longer optional, they’re a necessity for Canadian businesses looking to grow. While the complexity can feel intimidating, success comes down to choosing the right method for the right scenario:
- Cards for smaller e-commerce sales.
- Wires for big-ticket B2B transactions.
- Multi-currency accounts for frequent U.S. payments.
With the right setup, you’ll not only reduce costs but also build trust with international customers and suppliers.
Curious if there’s something out there that’s better for your business? Let’s start the conversation.
