May 12, 2019

Canadian Stripe account with US Bank for deposits?

Anna Maste @Skulegirl

We’re Canadian, but most of our customers are in the US. We use Stripe, charge in USD and have a USD bank account that we deposit to, but it’s currently an account at a Canadian bank.

Occasionally we have customers who get dinged with foreign transaction fees by their issuing bank. We also have some whose debit cards decline the transaction completely because they’re restricted to not allow any cross-border transactions.

I know I can open an account at BMO Harris, which is a US Bank, and have my USD sales deposit there. But I’m still not 100% convinced whether this will remove the “cross-border” designation from my customers transactions, since we’re still a Canadian company and Stripe is likely dealing with the Canadian arms of the credit card overlords.

Has anyone had success doing something like this, ie a USD bank account at a US bank attached to a Canadian Stripe account which successfully removed the foreign transaction fees/restrictions from their US customers?

  1. 1

    Anna, I've experienced this problem, and the only real solution is creating a U.S. corp and registering your Stripe account via this corp. Simply opening a U.S. bank account at U.S. bank won't make a difference. It goes off based on where your business or the owners of the business are from in regards of the tax info provided to Stripe.

    But there are other considerations you'll have to take account before making such a decision to see if its worth it, since you'll now have to deal with taxes and tax reporting in both the U.S. and Canada.

  2. 1

    I've been using a TD Cross border account (it's based in the US) with stripe and have the same problem with payments being declined. It doesn't matter where your bank account is. What matters is where your company is from. Never had an additional transaction fee as far as I know though.

    If you really want to solve this I think you need to incorporate in the US, but that creates a lot more problems than it solves.

  3. 1

    I am surprised to hear you have clients that get charged a foreign transaction fee, it's my understanding that if you are making the charge in USD, then they pay fully in USD and no foreign exchange fee would apply (other than if you choose to have the money moved into CAD on your end).

    Regardless of that I am also interested in the second point, about US customers not being to use US Debit cards, and what it might take to allow this.
    I use Stripe Connect, and my Clients are in the USA. When their own customers try to pay through the platform with Debit cards, the transaction is declined because Canadian Stripe accounts cannot accept US Debit cards (and certain US Credit cards), this is unfortunate as the main charge is made on a full US Stripe account, but because we are involved it cannot complete. An easy way to allow this would be ideal, but I have a feeling you need a US Based Stripe account (create a new account and register with a US address etc)

  4. 1

    We're a German company, and we have the same issues.

    In my understanding, and I am not a lawyer, the moment you have a "real" US bank account, your company essentially operates from the United States. This is why Stripe seemingly treats all accounts by non-US companies as non-US accounts, and that results in fees and blocks. Talking to the Stripe people resulted in them suggesting registering a US subsidiary and opening a US bank account.

    I guess the Stripe Atlas program would work for that. Please be aware that this would make you subject to federal US taxation. As I said, we have the same problem and have yet to find a solution.

    1. 1

      Having a real US bank account on its own is not enough, you also need to incorporate in the US, otherwise, the transaction will still count as foreign as it's based on where the business is registered, not where the bank account is.