Canadians are nearly three times more likely to encounter payment fraud when using cash than when using credit cards, according to a new study from Payments Canada. The finding highlights a disconnect between actual risk and perceived security, as the majority of Canadians continue to view cash as the safest payment method.

The study found that Canadians using cash experienced 22.4 fraud incidents on average over a six-month period. That is significantly higher than the number of fraud experiences associated with credit or debit cards (8.8 each). Despite this, Canadian’s still consider cash to be the most trustworthy payment method, followed by Interac e-Transfers (a Canadian service that enables bank-to-bank money transfers via email or mobile number), credit cards, EFTs, and debit cards.

While the overall rate of payment fraud has remained consistent since 2021, with 13 per cent of Canadians affected over the most recent six-month period, the nature and distribution of fraud have shifted. According to Payments Canada, traditional fraud methods involving cash, such as counterfeiting, impersonation schemes, and physical theft, remain prominent and may be benefiting from increasingly sophisticated tactics.

Newcomers to Canada reported fraud at a rate of 25%, nearly double the national average. Younger adults, particularly those aged 18 to 34, represented the largest share of recent fraud victims, accounting for more than half of cases occurring in the last month. Older Canadians, while less likely to experience fraud overall, were also less likely to lose money when fraud did occur.

Financial loss was reported in 60 per cent of fraud cases, although most involved amounts below $500. Of those affected, the majority contacted their financial institution, and a significant proportion were reimbursed either fully or partially. Canadians aged 55 and older were more likely to experience data theft without financial loss compared to younger cohorts.

The report also found that fraud-related anxiety is beginning to influence consumer behaviour. More than half of Canadians surveyed stated that concerns about scams affect how they make payments and where they choose to shop. A quarter of respondents said they were at risk of missing bill payments due to hesitancy around responding to potentially fraudulent communications, a figure that has risen slightly since last year.

While digital awareness has been spreading as more aspects of daily life are conducted online, many Canadians still struggle to distinguish between legitimate payment-related messages and fraudulent ones. A sizeable portion admitted to using weak password practices (19%) or sharing sensitive personal information via email or text (6%), suggesting that education and digital literacy continue to present challenges.

According to Payments Canada, fraudulent activity involving unauthorised transactions and impersonation scams is still common, although both methods declined compared to the previous year. Other types of fraud, including stolen card purchases and transactions conducted through fake websites, increased slightly over the same period.

Systematically overcoming fraud is never an easy undertaking, though Payments Canada is taking steps to enhance its system-wide protections. The organisation is contributing its payments infrastructure expertise to the Canadian Anti-Scam Alliance, a multi-sector coalition involving financial institutions, telecom providers, digital platforms, law enforcement agencies, and government bodies. As part of this effort, a centralised fraud detection system is being integrated into Canada’s forthcoming Real-Time Rail (RTR) system, with the technical build expected to conclude within weeks.