Canada’s payment ecosystem is undergoing a profound transformation, driven by rapid technological advancements and shifting consumer behaviors. According to recent analyses from Payments Canada, the rise of e-commerce and digital payments is reshaping how Canadians transact, while the growing sophistication of fraud demands innovative defenses.
These insights, drawn from Payments Canada’s reports on payment trends and fraud prevention, highlight key developments and strategies for businesses and consumers in 2025.
The surge in e-commerce, accelerated by the global pandemic, has solidified digital payments as a cornerstone of Canada’s economy.
In 2024, Payments Canada systems processed a staggering $107 trillion, equivalent to $424 billion daily, underscoring the scale and importance of secure payment infrastructure.
The shift from cash to digital transactions continues, with mobile and contactless payments gaining traction.
Consumers increasingly favor seamless, omnichannel experiences, prompting businesses to integrate payment systems that support diverse methods like e-wallets, instant payments, and buy-now-pay-later options.
This trend aligns with global patterns, where non-cash transaction volumes are projected to grow significantly by 2028, fueled by instant payment schemes like Canada’s Real-Time Rail (RTR) system.
Mobile payment adoption is particularly notable, with smartphone penetration driving the use of apps like Interac e-Transfer, which saw a 43% increase in first-time users during the pandemic’s early stages.
Businesses are also adapting, with 48% perceiving mobile payments as secure for purchases and 47% for receiving customer payments.
However, this digital shift brings challenges.
The complexity of e-commerce platforms and the integration of social commerce—where purchases occur directly on platforms like Instagram or TikTok—require businesses to prioritize user-friendly, secure checkout experiences to maintain customer trust.
Despite these advancements, payment fraud remains a persistent threat. Payments Canada’s fraud analysis reveals that while awareness of fraud risks has grown since 2020, vulnerabilities persist.
Approximately 21% of Canadian businesses and 12% of consumers reported experiencing payment fraud, with common tactics including impersonation scams and unauthorized credit card transactions.
Globally, e-commerce fraud losses are projected to reach $343 billion between 2023 and 2027, with North America accounting for 42% of fraud by value.
In Canada, concerns about fraud influence payment preferences, with 53% of businesses and 50% of consumers adjusting behaviors to prioritize security, such as choosing trusted e-commerce sites.
To combat these threats, Payments Canada emphasizes data-driven fraud prevention strategies.
Businesses are increasingly adopting multi-layered approaches, leveraging artificial intelligence (AI) and machine learning to detect anomalies in real time.
On average, merchants use five fraud detection tools, with over 50% employing credit card and identity verification services.
Behavioral biometrics—analyzing typing speed or device handling—offer frictionless authentication, reducing fraud without compromising user experience.
Additionally, payment orchestration platforms are gaining prominence, enabling businesses to manage multiple payment providers through a single interface, enhancing efficiency and security.
The rise of AI-driven fraud, such as deepfake scams and phishing attacks, poses new challenges.
In 2024, global card data breaches surged, with 269 million records exposed, driven by vulnerabilities like the CosmicSting exploit.
Canadian businesses are responding by investing in robust encryption, real-time verification, and collaboration with financial institutions and law enforcement.
Payments Canada’s initiatives, such as the Financial Institutions Branch Directory (FIBD) and updated payment standards, support these efforts by ensuring secure transaction routing and compliance.
Looking ahead, the interplay of innovation and security will define Canada’s payment landscape in 2025.
Businesses must balance seamless customer experiences with robust fraud defenses, while consumers are encouraged to stay vigilant, using trusted platforms and monitoring transactions.
As instant payments and open finance gain momentum, supported by regulatory frameworks like Europe’s digital wallet mandate, Canada’s payment infrastructure is poised for further growth.
By embracing AI, biometrics, and collaborative strategies, stakeholders can navigate this dynamic environment, ensuring a secure and efficient future for digital transactions.