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Canada’s Path to Passwordless Authentication: Key Drivers in 2025
In 2025, Canada is rapidly advancing toward the widespread adoption of passkeys: device-based credentials that utilize biometrics or PINs for secure, seamless authentication. This shift is not only improving user experience but is also a direct response to the growing need for fraud reduction in Canada, where a quarter of Canadians have recently encountered financial fraud. Passkeys offer strong resistance to phishing and data breaches, making them a standout solution as the country develops its digital identity framework.
Regulatory Momentum: OSFI Guideline B-13 and Privacy Laws
A robust regulatory landscape is accelerating passkey adoption across Canadian sectors. OSFI Guideline B-13, which became effective in January 2024, compels federally regulated financial institutions to implement strong multi-factor authentication and discourages less secure methods like SMS-based OTPs. In parallel, federal and provincial privacy regulations, including PIPEDA, Quebec’s Law 25 and Bill C-27, stress the importance of secure authentication and privacy by design, indirectly supporting passwordless authentication Canada-wide.
Financial Sector Leadership: Banking Passkeys and FIDO Alliance Canada
Canada’s financial institutions are leading the passkey movement. Major banks such as RBC are working closely with industry groups like the FIDO Alliance Canada to advance passkey standards. PayPal passkeys have been accessible to Canadian users since mid-2023, and top banks like Scotiabank, BMO, and CIBC are integrating biometric authentication in their mobile apps as a foundation for future passkey rollouts. Credit unions, fintech startups, and insurers are also piloting passwordless authentication, driven by both compliance needs and customer demand for frictionless security.
Retail and E-commerce: Shopify Passkeys and Beyond
Passwordless authentication is also gaining momentum in Canada’s retail sector. Platforms like Shopify now offer passkey support, enabling secure, user-friendly logins for e-commerce customers. This trend reflects a broader move toward passwordless solutions in digital marketplaces, enhancing both transaction security and user trust.
Public Perception and Adoption Trends
While around half of Canadians are open to using passkeys, there is still some hesitation due to misconceptions about the technology’s complexity and security. Demographic studies indicate that newcomers and gig workers are more likely to adopt new authentication methods, presenting early opportunities for broader adoption. Canadian cybersecurity experts emphasize that passkeys reduce the risk of human error (one of the most common vectors for breaches), and government initiatives are integrating FIDO2-based passkeys into digital identity services.
Current Challenges and What’s Next
Despite strong progress, Canada faces several challenges on the path to full passkey integration. Consumer education is crucial to dispel myths and boost trust. Seamless integration with legacy systems and consistent regulatory clarity across sectors remain ongoing hurdles. However, the convergence of regulatory guidance, market innovation and rising public awareness positions Canada as a frontrunner in the global shift to passwordless authentication.
Conclusion: Toward a Secure, Passwordless Canada
Driven by regulation, technology, and user demand, Canada is poised to lead in passkey adoption across banking, retail, and public services. The transition to passwordless authentication promises significant improvements in security, user experience and fraud reduction.
Find out more about the evolving landscape of passkey adoption in Canada, including in-depth analysis and future outlook, at https://www.corbado.com/blog/passkeys-canada-overview