More people than ever are moving internationally, and they need reliable access to their money wherever they go. That’s why cross-border banking is an essential service for anyone who lives and works in a foreign country or has family abroad.
If you fall into any of these categories, you’ll soon learn that banking may not work the same in other countries as it does at home. But navigating this long, sometimes complicated process doesn’t have to be a chore. Global financial services like Remitly make it easy to transact internationally. In this article, we’ll explore what cross-border banking is, what it involves, and the pros and cons everyone should be aware of.
What is cross-border banking?
Cross-border banking is the bedrock of the global economy. According to the World Bank, it refers to the financial services, transactions, and management that take place between people in multiple countries. These processes enable the movement of money across national borders.
Domestic vs international banking
If you want to get paid locally, take care of your bills, or buy groceries from your favorite corner store, you’ll need a Canadian bank account. This is just one part of a domestic banking system: it focuses solely on services and transactions within one country, following its specific currency and laws.
On the other hand, overseas banking involves handling cross-border operations, multiple currencies, and diverse legal and regulatory requirements.
Overview of key differences
Several key factors separate domestic and cross-border banking processes, such as the following:
| Domestic banking | International banking | |
| Scope | Limited to a single country | Operates in multiple countries |
| Currency | Deals with one local currency | Involves various currencies and foreign exchange transactions |
| Services | Serves customers within the domestic market | Offers a wider range of services to customers in different countries |
| Regulations | Follows the laws of the country of operation | Must adhere to diverse rules and regulations |
| Risk | Rarely affected by foreign market fluctuations | Exposed to risks of global operations, such as foreign exchange across countries |
Types of cross-border banking services
Cross-border banking grants you access to a wider range of tools to manage your money. These global financial services include everything from overseas investments to international money transfers, foreign exchange, and multi-currency accounts.
International money transfers
If you receive international payments or have family abroad, you may already be familiar with international money transfers. These can take a few forms:
- Wire transfers: Move funds from a Canadian bank account to an international one using a secure financial network, most commonly SWIFT, online and in person.
- Online money transfer services: Leverage online tools and platforms to transfer money internationally without the need to visit a bank.
- Digital remittance platforms: Ideal for smaller, frequent international money transfers, this option lets you collect cash in person, via your mobile wallet, or directly into your bank account.
| Wire transfers | Online & digital platforms | |
| Timeframe | 3 to 5 business days | Minutes to 24 hours |
| Typical fees | $0–$50 USD (approximately $0–$69 CAD, as of September 2025); third-party fees apply | 1% to 3% of transferred value; no hidden fees |
| Exchange rates | Less competitive | More competitive and transparent |
Multi-currency accounts
Opening a multi-currency bank account is especially useful for frequent travellers, expats, freelancers, and international businesses. Using a single account makes it easy to manage all your currency balances in one place.
In Canada, the traditional “Big 5” banks might be a good place to start.
Foreign exchange services
What if you need to convert your cash into a new currency? Foreign exchange services will help you get the job done.
Expect to pay a fee anytime you convert currency, whether in-person or online. Brick-and-mortar banks have higher rates, while dedicated foreign exchange services are often more competitive.
International investment accounts
If you tend to take a global approach to investing, this tool’s for you. Cross-border investment accounts let you enter financial markets outside your home country. You can trade foreign stocks or ETFs (exchange-traded funds) to diversify your holdings, and purchase international mutual funds to guard against fluctuations in the local market.
But if you’re planning to venture into the international investment world, you should know the associated rules and risks. Always look out for the following:
- Double taxation: Canada only has a tax treaty with 84 countries to avoid double taxation. Check if you’re eligible here.
- Reporting requirements: The Canada Revenue Agency (CRA) has strict requirements for reporting foreign investments, property, and income. In general, if the total value of foreign funds is above $100,000 USD (approximately 138,000 CAD), you must file Form T1135 to stay compliant.
To stay on the up-and-up, it’s best to partner with internationally-experienced banks and service providers.
The benefits of cross-border banking platforms
International banking has its perks, especially when you’re using online services. Some of the main ones include:
- Speed: Move money instantly, or wait just 24 hours.
- Convenience: Easily manage all your transactions in one place.
- Flexibility: Transfer funds 24/7, from anywhere you want.
- Transparency: Get a clear view of the fees, exchange rates, and timeframes to expect.
Let’s say you’re a freelancer in Canada working with clients around the world. That means you receive payments in various currencies, from euros and pounds to American dollars. Using a multi-currency platform lets you keep track of your finances and simplify your month- and year-end accounting.
Challenges and considerations
With the benefits in mind, are there any challenges you should know about? Here’s a quick overview:
Regulatory compliance
International banking has a lot of red tape. Unlike what many people think, it isn’t as simple as going online and sending money: you need an account, which will likely require verification.
International banking requirements in Canada dictate that all institutions follow the Know Your Customer (KYC) protocol. Sender identities must be verified for international transactions of $1,000 USD (or 1,381 CAD) or more.
“Suspicious activity” is also monitored to comply with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The bank will monitor all transactions, looking for the appearance of fraud, money laundering, or other illegal activities.
They are also required to flag large transactions, typically of $10,000 USD (approximately 13,800 CAD) and above, to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)..
Fees and exchange rates
Banks charge a flat fee for cross-border transfers, whereas online services determine costs based on the amount you send. You’ll also pay a monthly fee for traditional international bank accounts.
In Canada, cross-border banking fees vary, but here are some examples for a typical Canada/US account:
| Bank account | Account fee | Transaction fees |
| CIBC USD Personal Account | – | $0.75 USD (1.04 CAD) |
| TD US Daily Interest Chequing Account | – | $1.25 USD (1.73 CAD), or free with a minimum monthly balance of $1,500 USD (just over $2,000 CAD) |
| Scotia US Dollar Daily Interest Account | $1 USD (or 1.38 CAD), or free with a minimum $200 USD (approximately $275 CAD) balance | 2 free per month, otherwise $1.25 USD (1.73 CAD) each |
But banks may not be as transparent as you think. It’s all too common for these institutions to markup the exchange rate between 2% and 5%.
Always compare services before committing, and don’t get drawn by “free” transactions, as there might be a catch! Additionally, plan your transfers well in advance so you’re not stuck paying higher fees for fast delivery.
Security concerns
It’s natural to worry about fraud and data breaches when transacting across borders. However, reputable companies will use advanced encryption and two-factor authentication while constantly monitoring things to keep you—and your funds—safe.
Plus, remember that most wire transfers are irreversible, so once the money is sent, you have little recourse. Apply these tips to minimize the risk of losing out:
- Stick to the well-known platforms, and check user reviews before making your choice.
- Use whatever security features the platform has available, including two-factor verifications and emails or SMS functions to track the transaction.
- Never use public Wi-Fi to do your overseas banking.
- Always keep your login details private and update passwords if there’s any doubt.
How to choose a cross-border banking provider
The first step is to make sure the bank or international banking service is reputable by making a quick check on FINTRAC. This will confirm that the service is in compliance with all the necessary global and local financial services guidelines.
Look for a platform that has transparent fees. Also, determine the exact monthly operating cost and any minimum balance requirements.
Lastly, review the guaranteed delivery times. Consult the website or actual consumer reviews to assess responsiveness, languages available, and platform usability.
Getting started with cross-border banking
Once you’re satisfied with a specific platform, it’s time to create an account.
Documentation requirements
The specific requirements will vary based on the bank and often the amount of the transaction, but this is what to expect:
- A government-issued photo ID, such as a driver’s licence or passport.
- Proof of address, including mailed documents like a government letter or utility bill.
- Proof of income or money origin, like bank statements, paystubs, and tax returns.
To further confirm your identity, the institution may also require a video call.
Setting up your account
Most account applications are easy and can be done online.
- Find the type of account you want and click the button to register or open a new account
- Add your details
- Attach verification documents
- Wait for approval
- Log in to your account
- Make your first deposit if required
- Start sending and receiving money internationally
This entire process can be done in as little as an hour or two with online and digital platforms, and you may wait up to five business days for traditional banks.
Making your first international transaction
Now that you’ve learned all there is to know about international banking, chosen your provider, and set up the account, it’s time to reap the rewards. Here’s how:
- Add the recipient info: Details like the recipient’s full name, account number/IBAN, and/or SWIFT/BIC code are required, along with additional information that varies with each platform.
- Enter the amount: Double-check the currency and enter either the amount you want to send in your local currency or the exact amount you want the sender to receive. The platforms will automatically adjust the numbers to coincide.
- Double-check everything: Review the fees, recipient info, and amounts before hitting “send”.
Tips for your first cross-border transaction
- Shop around for the best deals on exchange rates and fees.
- Keep track of any confirmation or transaction numbers. You can expect real-time email or SMS notifications when money is sent and received.
- Review timing guarantees so that the money arrives when you need it to.
- Watch out for daily transfer limits.
- Start small if you’re not 100% confident.
Take control of your international finances today
In our global world, cross-border banking is almost inevitable. It’s useful for sending money to family, keeping your international business finances organized, and even making regular purchases after migrating to a new country.
Research your option carefully and create test transactions to get a true handle on the process and fee structure. You’ll always benefit when you manage all your finances in one place.
FAQs
Is cross-border banking safe?
Yes, Canada’s banks are among the most secure in the world. Two-factor authentication and SSL/TLS encryption are standard, and cross-border accounts come with the same protections as a Canada-only one. Additionally, all deposits up to $100,000 USD (approximately 138,000 CAD) are automatically insured with the Canada Deposit Insurance Corporation (CDIC).
How much does cross-border banking cost?
With cross-border banking, costs apply to using your bank card overseas, currency conversion, and transfer fees. Plus, you may have a monthly or annual fee charged to your international bank account. Non-local ATM usage generally attracts a flat fee of up to $5 USD (just over $6 CAD). To convert currencies, expect a 2% to 5% markup, and international money transfers can cost anywhere from 1% to 5% of the transaction.
How long do international transfers take?
The timeframe varies based on the transfer method. Online money transfers and those done using digital remittance platforms are the quickest. Depending on the amount, they can be completed anywhere from instantly to 24 business hours. Wire transfers from Canadian banks can take up to five business days.
Do I need to report international banking activity?
People transferring money to or from Canada do not need to manually report the transaction to the CRA. Any individual EFT of $10,000 USD (approximately 13,800 CAD) or more, or multiple ETFs adding up to over the same amount within 24 consecutive hours, is automatically reported by the financial institution making the transfer.
Can I use cross-border banking if I’m not a permanent resident?
Yes, certain Canadian traditional banks allow non-permanent residents to hold accounts. For example, the RBC Newcomer Advantage account is the most flexible option for foreign workers and students. It currently offers free international money transfers to most countries. Additionally, you can use online money transfer services like Remitly without being a permanent resident.