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Cross-border Ecommerce - The Paypers

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The Cross-Border Ecommerce Community (CBEC) enables Merchants, Payment Service Providers, ISOs and Acquiring Banks to access valuable content about mature and developing markets that can support strategic decision-making. Read more

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Ecommerce fraud and online fraud prevention in Canada

Read below about payment fraud, online fraud and fraud prevention in Canada

More information can be found in the Cross-border Ecommerce Report- Canada

In Canada, as elsewhere, ecommerce growth, coupled with the introduction of EMV, brings increased risk of online fraud. Carefully tailored fraud prevention measures play an important part in countering fraudsters and protecting genuine consumers.

Canada started to roll out EMV chip and PIN in 2008 when card fraud was running at USD 512.2 million. It had a significant impact, especially on counterfeit fraud. In 2013, total credit card fraud was USD 465.1 million (a 5.87% increase on 2012), while domestic counterfeit fraud had fallen a further 23% in 2013 to USD 52.8 million.

Canadians are among the highest users of debit cards in the world and the slower introduction of chip and PIN to debit cards by Interac meant some early migration of fraud to debit cards, where losses went up by 26% (USD 142 million) in 2009 according to the Criminal Intelligence Service. The Canadian Bankers Association reported that debit card fraud losses, then, dropped to USD 29.5 million in 2013.

Aite Group reports that 25% of Canadian cardholders have experienced fraud from 2010, a figure that is below the global average. The 2014 CPA Canada Fraud Study found that 29% of respondents claimed having been victims of financial fraud, with the vast majority referring to credit or debit card fraud, online fraud and ID theft.

While ecommerce in Canada has historically lagged behind many markets, Forrester* reported in April 2013 that the Canadian online retail market had been going through a renaissance, fuelled by cross-border shipping options from US and international brands and, more recently, proliferation of localised stores. Two-thirds of Canadian online shoppers have purchased from a US or international store in the past, but Canadian brands are successfully fighting back with their own ecommerce strategies. According to Statista figures, Canadian B2C ecommerce sales reached USD 20.6 billion in 2013 and are anticipated to reach USD 36.9 billion in 2017.

The Forrester study indicates that 31% of consumers, in a recent study, said that they did not want to give out their card numbers over the internet. It will be important for merchants within and outside Canada to incorporate effective fraud prevention solutions to underpin their online offerings and build consumer confidence.

While 3D Secure, mandated in Canada, may be expected to promote this confidence, many Canadian consumers continue to opt out when prompted to activate 3DS while shopping. Recent advances in risk-based authentication may help to improve the consumer experience for customers who are resistant to authentication methods that interrupt the sales process.

More information about ecommerce fraud, mobile fraud and online fraud prevention in Canada can be found in the Cross-border Ecommerce Report - Canada