For many businesses, payments have become nearly invisible. Funds move instantly, approvals happen digitally, and suppliers, employees and customers expect transactions to be completed without delay. While this creates efficiency, it also reduces the time available to identify suspicious activity before money leaves the organization. In today's environment, payment fraud is as much a governance challenge as it is a security concern.
The Canadian business fraud landscape is changing
Canadian data shows fraud losses are rising, and scams are becoming more convincing. The Canadian Anti-Fraud Centre reported more than $351 million in fraud losses in the first six months of 2026 and estimates that only 5% to 10% of fraud is reported, meaning the true impact is likely much higher.1
Payments Canada found that one in five Canadian businesses experienced payment fraud within a six-month period, including impersonation fraud, intercepted business e-Transfers, and credit card fraud.2 Canadian Federation of Independent Business research found that half of Canadian small business owners experienced attempted or successful fraud in the past year, with affected businesses losing an average of $7,800.3
The cost is rarely just the amount transferred. Payment fraud can strain cash flow, delay payroll, interrupt supplier relationships, trigger chargebacks, expose client payment data, and damage client confidence.
At the same time, payment innovation is changing the speed and complexity of fraud risk. A recent Payments Canada PayPod episode described financial crime prevention as entering a “hyper-speed era,” driven by risks such as AI-enabled scams, deepfakes, and SMS blasters4.
Emerging technologies are reducing the effort required to create convincing fraudulent communications. AI-generated emails, synthetic voices and realistic impersonation attempts are making traditional warning signs harder to detect. As a result, businesses may need to place less reliance on instinct and more reliance on structured verification processes.
For businesses that accept client payments, risks also extend to card-not-present fraud, account takeover, compromised terminals, point-of-sale attacks, chargebacks, and counterfeit card activity. These risks apply to any business that depends on digital payments, third-party technology, and trusted client interactions.
The challenge is not simply that fraud is becoming more common. It is becoming more difficult to distinguish legitimate requests from fraudulent ones. Criminals increasingly exploit trusted relationships, realistic communications and urgency to bypass traditional controls.
Growth can create hidden payment risk
Payment fraud often emerges during periods of organizational change. Expansion into new markets, vendor growth, acquisitions, staffing changes and digital transformation initiatives can all introduce gaps in payment controls.
As businesses scale, payment processes often become more complex. New vendors, additional approvers, geographic expansion and changing employee responsibilities can all increase the number of touchpoints where payment fraud may occur. Controls that worked effectively at one stage of growth may require re-evaluation as transaction volumes and organizational complexity increase.
Unlike traditional fraud risks, modern payment fraud often succeeds within minutes. As payment ecosystems become faster and more interconnected, organizations have less time to investigate unusual requests before funds are transferred. This shift is changing the balance between speed and control.
The common thread: speed, trust, and pressure
Fraudsters increasingly target business processes rather than technology alone. Their objective is to influence decision-making by creating urgency, exploiting trust and mimicking legitimate business activity. In many cases, the transaction itself follows established procedures. The weakness lies in the information or instruction that initiated it.
The request may appear to come from a senior leader, supplier, client, or trusted employee, and the timing may align with real business activity.
As phishing, malware, ransomware, insider threats, and vendor risk increasingly overlap with payment activity, businesses need processes that include verifying all messages and transactions, even ones that look authentic.
As payments become faster and more connected, businesses have less time to detect, challenge, or reverse suspicious activity. This makes prevention, early detection, and clear escalation even more important, especially before money is moved.4
From fraud awareness to fraud resilience
Fraud resilience requires teams across the full payment lifecycle to work together. Finance, IT, security, procurement, payroll, operations, client service, vendor management, and senior leadership all play a role in protecting money movement and the data that supports it.
For finance teams, payment fraud should increasingly be viewed as an operational resilience issue alongside liquidity, treasury management and business continuity planning. The ability to prevent, detect and respond to suspicious payment activity can help reduce financial loss and minimize disruption to normal operations.
Fraud resilience is increasingly becoming a boardroom and executive leadership discussion rather than solely an operational responsibility. Organizations that incorporate payment security into broader risk governance may be better equipped to respond as threats evolve.
To build fraud resilience and protect people’s hard-earned money, we need collaboration across the payments ecosystem. Financial institutions, businesses, technology providers, regulators, and law enforcement all have a role to play in sharing intelligence, strengthening controls, and maintaining trust as payment systems become faster and more data-driven.4
A leadership imperative
As payments become faster, fraud prevention increasingly depends on deliberate moments of verification. Organizations that embed trust, accountability and resilience into their payment processes will be better positioned to protect both financial assets and stakeholder confidence in an increasingly digital economy.
The businesses best positioned for long-term resilience to withstand payment fraud will be those that strengthen trust through layered controls, secure payment processes, confident employees, rapid response plans, and leadership that treats fraud prevention as good governance.
To learn more on how to protect your business visit us at www.scotiabank.com/BusinessProtection
Disclaimer
This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third-party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly, and action is taken based on the latest available information.
References
1. Canadian Anti-Fraud Centre. (June 30, 2026). https://antifraudcentre-centreantifraude.ca/index-eng.htm
2. Payments Canada. (2024). One in five Canadian businesses experienced payment fraud in the past six months. https://www.payments.ca/insights/research/one-five-canadian-businesses-experienced-payment-fraud-past-six-months
3. Canadian Federation of Independent Business. (2024). The cost of fraud: How small business owners are tackling risks and challenges. https://www.cfib-fcei.ca/en/research-economic-analysis/the-cost-of-fraud-how-small-business-owners-are-tackling-risks-and-challenges
4. Payments Canada. (July 29, 2026). Episode 43: Fraud prevention strategies for real-time, open banking and digital payments. The PayPod. https://www.payments.ca/episode-43-fraud-prevention-strategies-real-time-open-banking-and-digital