Payment fraud in Canada: Key insights on the path to safer payments

Fraud is a significant and growing issue globally and the Canadian market is no exception. As we modernize Canada’s payment infrastructure, we have an opportunity to collaborate toward advancements that make payments safer. A key part of this effort is gaining a better understanding of Canada’s fraud payment landscape.

According to research from Payments Canada, 13 per cent of consumers and 20 per cent of businesses have experienced payment fraud in Canada over a six-month period. Among consumers and businesses who fell victim to fraud, incidents involving money loss were $500 or less (46 per cent) and $3,000 or less (63 per cent), respectively.

In fact, fraud affects the payment behaviours of 54 per cent of Canadians, influencing who, how and where they transact. Nearly one in three (32 per cent) struggle to identify legitimate payment-related communications, while 22 per cent worry about missing bill payments due to fear of scams.

The top three types of payment fraud experienced by consumers include: unauthorized transactions on bank or credit card statements (38 per cent), impersonation fraud, where someone contacts the victim via email, phone, SMS, or social media pretending to be someone else (34 per cent) and stolen credit card information leading to unauthorized purchases (18 per cent).

While businesses have a higher rate of payment fraud than consumers, the types of fraud were similar for both segments. The top three types of payment fraud experienced by businesses are: impersonation fraud (25 per cent), interception of e-Transfers (where funds are diverted to a different bank account) at 22 per cent and fraudulent charges on bank or credit cards (20 per cent).

The study also found that while many consumers and businesses practice fraud prevention measures, there is room for improvement in password management. Thirty-five per cent of consumers and 39 per cent of small and medium enterprises (SMEs) store passwords on smartphones, computers, or in emails/notebooks, while 19 per cent of consumers and 25 per cent of SMEs use the same password for all accounts.

We all share the responsibility of protecting ourselves and others from fraud.

Payments Canada is contributing to this effort by proactively working to mitigate fraud on the Real-Time Rail (RTR), Canada’s forthcoming real-time payments system, through the introduction of centralized fraud services. We’ve observed in other jurisdictions that as money moves faster, fraud increases. Canada aims to be among the first to launch a real-time payment system with these centralized fraud services from day one.

To learn more about the payment fraud experience in Canada and the work being done to make payments safer, register for The SUMMIT, Payments Canada’s annual conference, using promo code SUMM25PCVIP to save $100. Can’t attend? Watch this video from The SUMMIT Series: Shaping the future of fraud in real-time payments.