Canadian businesses have a higher rate of payment fraud than Canadian consumers

Payment fraud for Canadian businesses

For those businesses falling victim to fraud, 63% admitted to have lost around $3,000 or less. Additionally, the rate of payment fraud remained consistent from 2023 at 19%, despite 63% of businesses who report that they feel confident in knowing how to protect themselves against payment fraud and cybercrime, and a further 61% who said they are more aware of how to recognize potential threats.

Fraudsters are more privy to target larger-scale commercial businesses, the likes of which experienced the highest rate of fraud at 26%, compared to medium (23%) and small (16%) businesses.

Businesses have also noticed an increase in activity directed at them via smartphone (42%), social media platforms (39%) and retail merchant sites, including e-commerce sites or apps (34%). Nearly half (45%) have noticed an increase in fraudulent activity directed at them via email in the last 12 months.

Other types of payment fraud include:

• Someone intercepted a business' e-Transfer (sending or receiving) to deposit the money into a different bank account (22%)
• Fraudulent charges on their bank or credit cards (20%)
• Purchase made from stolen credit card information (19%)
• Purchase made from stolen debit card information (18%)
• Payment made by a fraudulent cheque (15%)
• Purchase made from a fraudulent website (15%)

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Room for improvement

Canadian businesses have certainly adopted some great cyber hygiene methods to protect themselves against fraud. Close to 7 in 10 respondents indicate that they usually limit the amount of sensitive information about the business they share online and only provide it when required. Over two-thirds (67%) of businesses make the effort to check the safety of an e-commerce site and go with trusted sites only when buying online. Moreover, 65% of businesses have enabled two-step authentication for accessing their accounts whenever it is available.

At the same time, there’s room for improvement. For example, 39% of small and medium enterprises (SMEs) and 41% of commercial businesses store their passwords on a smartphone, personal computer or laptop. One in three (33%) commercial businesses and one in four (25%) SMEs tend to use the same password for all their business-related accounts.

When it comes to transferring money online, three in five businesses (61%) would be willing to better protect themselves from scams, even if the process called for more time-consuming steps.

However, despite the pervasiveness of fraud, 65% of businesses feel protected by their bank, credit union or credit card provider when it comes to making payments, with 7 in 10 being fully or partially reimbursed after experiencing a financial loss.

Of those who lost money through payment fraud, 32% said they were fully reimbursed by their financial institution, versus 39% who were partially reimbursed and 29% who were not reimbursed.

Survey methodology

In total, 500 Canadian businesses were interviewed online, between March 25 and April 5, 2024, using Leger's online panel. To be eligible to participate, respondents had to be either full or partial decision-makers in the business. The margin of error for this study was +/-2.5%, 19 times out of 20.