Most Canadian business owners are confident in their defences but many are scammed
Payment fraud is higher among Canadian businesses than consumers despite two thirds of business owners feeling confident in being able to detect and prevent incidents.
A new survey from Payments Canada found that one in seven Canadian businesses had been victims of payment fraud that lost them money in the past six months, with an overall rate of 20% compared to 13% for consumers.
The most common forms of payment fraud were impersonation, where scammers pretend to be a trusted business source on the phone, email, or other message; intercepted business e-Transfers; and credit card fraud. Often fraudsters used stolen credit card or debit card information.
Larger-scale commercial businesses experienced the highest rate of fraud at 26%, compared to large (23%) and small (16%) businesses, almost two thirds of businesses lost $3,000 or less, and 71% of businesses were at least partially reimbursed by their financial institution.
Businesses reported an increase in the last year in the number of fraudulent, cybercrime, or suspicious incidents via email, smartphone, social media, and retail platforms.
"Addressing fraud risks is a central focus for the payment ecosystem. It requires a multifaceted approach that leverages technology, system innovations, evolving regulations and education through continued industry collaboration," said Donna Kinoshita, chief payments officer at Payments Canada. "Looking to the future, biometrics, multi-factor authentication, confirmation of payee systems, AI learning for fraud detection, centralized fraud systems, in addition to enhanced reporting and data sharing, are just some of the cross-industry innovations and initiatives that will play a role in helping protect Canadian businesses and consumers."
Taking risks
Although businesses say they feel there is a higher risk of payment fraud, many engage in risky behaviour such as:
- Opening unsolicited emails, texts or SMS messages (30%).
- Opening social media messages from unknown senders (26%).
- Downloading and using social media mobile apps for business purposes (22%).
- Sharing business and payer information online with e-commerce sites and apps (20%).
- Downloading and using lifestyle mobile apps for business purposes (19%).
- Making an online or in-app purchase (13%).
"Businesses face the challenge of ever-evolving and increasingly sophisticated payment fraud and cybercrime threats", said Jon Purther, Director of Research at Payments Canada. "Our study reinforces there is no room for complacency around measures to protect against and detect fraud risks for Canadian businesses regardless of size and industry, and that businesses are willing to take extra steps to make an online transaction if it meant they were better protected."
