Loop with Cato Pastoll | E229

Making cross border business banking easy.

On today's episode of the Fintech Impact, Jason Pereira is going to talk to Cato Pastoll, the CEO of Loop. They will discuss Loop's platform and how it helps companies operating as Canadian businesses get access to banking services in another market. Our goal is to help businesses anywhere who want to manage their business across borders, their finances, and in multiple jurisdictions, says Cato.

Episode Highlights:

  • 0.43: Loop is an online banking and payment platform. They help companies that are operating as Canadian businesses to get access to banking services in another market.

  • 1.17: Cato was originally focused on landing and getting international banking. He talks about the impetus for identifying the opportunity in international banking and the struggle that was there.

  • 2.20: During the pandemic, companies started going online and launching their products and services in the US, but they don't have a US bank account, and that means that they are losing as much as 5% in foreign exchange fees.

  • 3.10: When you transfer money back to Canada, and your money gets converted from USD to Canadian dollars, the bank does it at its super unfavorable exchange rate. 

  • 4.33: Cato says that they help companies get access to local banking in different markets. 

  • 5.40: Cato says that they have a branded card product which is the Master branded card, and what's unique about it is that it is a multi-currency card, and with a multi-currency card, not only are there no fees, but there is no conversion either.

  • 7.46: Cato explains that they have been able to automate the account opening process in terms of customer verification, ID collection, and all that type of stuff required to verify customers. 

  • 9.33: Cato says that they save companies time because we offer all things in one platform, and that is easy to use. We save the money because we give it all this way for free. 

  • 10.44: Customers are delighted, specifically because they are saving a huge amount of money on every dollar they are spending in non-Canadian currencies. 

  • 11.19: We can help companies manage their business in the jurisdiction without dealing with all the people and ongoing annual filings. That is a huge impetus for them to expand their business across borders, says Cato.

  • 12.09: Cato made it easier to deal with a major problem before allowing for potential companies to expand into a jurisdiction without the burden. 

  • 12.44: Working capital is a big thing for online businesses and e-commerce brands because you are buying inventory now and waiting for 16 to 90 days for that inventory to arrive. 

  • 13.20: With our card, you get 55 days of interest-free spending when you spend money on the card. We offer the first 55 days of working capital that you have for zero cost as a merchant, says Cato.

  • 15.21: It's not like we are giving you anything for no cost, but giving it to you for no cost means that you can use our product in the finance network and capital gap and save a lot of money, says Cato.

  • 16.38: At the end of the day, our goal is to solve companies' financial pain points. We are going to build meaningful, lasting relationships with companies and want them to stick around and use our products for a not short period but the long term, says Cato.

  • 18.24: There are lots and lots of companies doing business across borders. There is no reason they should be able to access the same or better quality making services in other markets as they do back home domestically.

  • 19.08: There is way too much of a structural gap between the capital that small companies can access and large companies can access, and that's driven by an efficiency more than a risk equation.

  • 23.06: Cato is not able to take any credit away from the founder of the business because they are 100% responsible for their own success, but the impact we were able to have by supporting them when nobody else would is a really exciting thing that kept him going every day.

3 Key Points

  1. There are now banks in the US that will open accounts for non-US residents, and the way that we do that is we are helping facilitate all the KYC and KYP processes required to onboard customers.

  2. Companies have loved the loop product so far. We have had people posting status recently on Twitter and social media accounts talking about how much money they are saving with Loop versus their bank cards that they were using before. 

  3. There are many acquirers or merchants, and processors who will help you collect money in different currencies by charging your customers in different currencies.

Tweetable Quotes

  • "We are helping simplify the process and operations of managing your business across borders." – Cato

  • "We have the ability to make domestic supplier payments through the exchange network, which is other countries' local payment rails." – Cato

  • "You want to match your revenue in expenses to each other, and you don't want to convert your revenue back into Canadian dollars and then convert Canadian dollars back into the other currency." – Cato

  • "Instead of our original model back that focused on individual business financing for growth or expansion purposes, we have gotten niched down and focused on a specific market segment, which is cross-border." - Cato

  • "We really want to demonstrate a lot of value to customers in this segment by giving them embedded value in our products from the get-go well." - Cato

Resources Mentioned:

Fintech ImpactJason PereiraFintech