Canadian consumers and businesses are more aware of payment fraud than before but must remain vigilant

According to research conducted by Payments Canada, both consumers and businesses have become increasingly more aware of payment fraud since the beginning of the pandemic.

Half of businesses and consumers both reported that their concern for payment fraud impacts their purchase behavior.

Additionally, 21% of businesses experienced some kind of payment fraud which remained stable over the last year, whereas 12% of consumers experienced fraud; an increase from pre-pandemic.

Although aware of fraud and despite some consumers and businesses experiencing it, the rate of fraudulent attempts have increased. Making it imperative that consumers and businesses stay vigilant when it comes to payment fraud and protecting their sensitive information. Below are some key takeaways from the report that relate to consumers and business.

‍Consumers have better awareness about payment fraud than pre-pandemic

‍Since the start of the pandemic, Canadians have better awareness and have stronger know-how in terms of protecting themselves from payment fraud. Payments Canada suggests that this is likely due to the fact that 27% of Canadians reported payment fraud in 2020.

‍Canadians feel protected by their financial institutions

‍About 60% of Canadians feel that their financial institutions or credit card providers do an adequate job of protecting money when it comes to making payments. In addition they feel that there is adequate resolution from these institutions in the event of fraud.

‍Consumers are satisfied with fraud resolutionAs mentioned above, Canadians are overall satisfied with the current state of their fraud resolution. Of the 12% who experienced fraud, ~70% were satisfied with the outcome. For most Canadians it takes less than one week to resolve the issue and 4 out of 5 who experienced fraud were fully reimbursed.

‍One in five Canadian businesses experienced payment fraud

‍21% of businesses experienced payment fraud. Of these businesses, the two most common types of fraud were someone requesting money by pretending to be someone else and credit card fraud. B2B and Online Only businesses suffered the most payment fraud at 30% of B2B and 32% Online Only.

‍Business to Business fraud losses are smaller than Business to Consumer

‍Although B2B fraud occurs nearly twice as much as B2C, the losses are smaller. Reported financial loss involves $500 or less for the vast majority (74% of surveyed businesses). Over half of B2C fraud reported losses greater than $500.

‍Businesses feel a need to improve employee awareness of fraud

‍Since the beginning of the pandemic, businesses feel more equipped to protect themselves against payment fraud. However, they feel employee awareness can be improved. The majority of businesses indicated that their employees are aware of fraud and that they do have fraud prevention measures in place however there is needed improvement.56% of businesses indicated that employees usually limit the amount of sensitive data. But, 30% of businesses say employees do not store passwords as securely as they should nor do they use password best practices.

‍Electronic payments perceived as safest and most secure above other forms of payment

Businesses perceive electronic payments as the most secure and safest form of payment. Half of businesses believe both ecommerce and mobile are more secure than paper and card methods. Consumers believe EFT as the safest option and younger Canadians are more likely to perceive mobile and in-app payments as most secure compared to other age groups.

You can find the full report here, and although both Canadian businesses and consumers appear to have a good handle on payment-fraud, their knowledge is preliminary. Canadians must continue to remain cautious to mitigate their risk for fraud as technology and the payments landscape continues to change in the future.