Canada’s middle market ($5M CAD to $750M CAD) continues to be a driving force in the national economy, but recent findings from the National Center for the Middle Market’s ("NCMM") 2025 Canadian Middle Market report show that businesses are preparing for a more dynamic environment. With costs rising and supply chains under pressure, Canadian executives are focusing on efficiency, profitability, and digital transformation. For banks and payment providers, this is a timely opportunity to help companies build resilience and modernize their financial operations.

Visa Commercial Solutions partners with NCMM to stay close to what’s happening in the field. The June 2025 survey of Canadian C-suite leaders sends a clear message: growth is still happening, but confidence is cooling, and firms are looking for smarter, more connected financial tools to help them navigate uncertainty.

Growth Continues, but Momentum Is Slowing

Canadian middle-market firms have reported solid revenue and employment growth over the past year, though both have softened compared to 2024. Revenue growth remains healthy, but executives expect next year’s expansion to be more moderate. Hiring is also continuing, but at a slower pace.

This deceleration stands in contrast to U.S. middle-market sentiment, where confidence in the economy is higher. Canadian leaders are approaching this year with more caution, reflecting concerns about cost pressures, trade policy volatility, and broader economic uncertainty.

This environment highlights the importance of:

  • Working-capital optimization tools to help firms manage liquidity

  • Flexible credit solutions that support investment without overextending

  • Digital payment platforms that reduce friction and improve visibility

When growth slows, efficiency becomes essential—and those who can deliver clarity and control will be indispensable.

Tariffs, Trade Policy, and Supply Chain Pressures Are Top Concerns

Given the tariff and trade policy developments between Canada and the U.S., Canadian executives expressed heightened concern about future tariff changes and the downstream effects on pricing, margins, and customer demand.

Many firms are already experiencing:

  • Increased input and logistics costs

  • Disruptions in sourcing and supplier reliability

  • Pressure to diversify supply chains

  • Reduced access to U.S. markets for certain goods

These challenges underscore the need for financial infrastructure that supports cross-border commerce, including:

  • Multi-currency payment solutions enabling seamless transactions across borders

  • Real-time liquidity management tools monitoring cash flow and optimizing working capital

  • Secure cross border transaction platforms providing transparency, fraud protection and compliance support

As supply chains become more complex, the ability to move money quickly, securely, and transparently is a real advantage.

Profitability and Efficiency Are Now the Strategic North Star

Improving profitability and margins is the top strategic priority for Canadian middle-market firms over the next one to three years. Companies are also investing in technology, expanding customer bases, and developing their workforce, but the unifying theme is operational efficiency.

Digitization plays a central role. Canadian firms see clear benefits in:

  • Productivity gains
  • Cost and time savings
  • Improved customer experience
  • Stronger competitive positioning

Yet cost remains the biggest barrier to adoption, followed by gaps in knowledge, time, and staff resources. This tension—digitization as both a cost saver and a cost challenge—creates an opening for financial partners to help firms modernize without adding complexity.

Payment modernization is one of the most accessible and high-impact starting points. Embedded digital payments, virtual cards, and automated reconciliation can deliver immediate efficiency gains while laying the foundation for broader digital transformation.

AI Adoption Is Rising, but Integration Challenges Persist

Canadian firms are actively exploring AI for analytics, automation, and decision-making. Many are training staff and building capabilities in-house. The anticipated benefits of operational efficiency, cost reduction, innovation, and stronger cybersecurity, align closely with the pressures firms face today.

However, concerns remain around:

  • Implementation costs
  • Skills shortages
  • Data quality and security
  • Uncertainty around ROI
  • Integration complexity

Banks and payment providers can help bridge these gaps by offering AI-enabled tools that are accessible, secure, and easy to integrate into existing workflows.

Digital Payments Are Becoming Essential Infrastructure

Across the Canadian middle market, digital payments are no longer optional—they’re foundational to operational resilience. Firms value the ability to embed payments into ERP and accounting systems, gain a single view of key metrics, and manage cash flow with confidence. More than 80% of firms report high confidence in their ability to manage liquidity over the next 12 months.

Yet challenges persist in accounts payable ("AP") and accounts receivable ("AR) processes. Manual workflows, reconciliation issues, fraud risk, and payment delays continue to strain teams. Interest in commercial cards is strong—driven by rebates, extended terms, and enhanced data—but supplier acceptance and integration barriers remain.

Financial partners can deliver meaningful impact through:

  • Automating AP and AR processes to reduce manual work and streamline operational processes

  • Enhancing fraud protection and payment security safeguarding transactions and reducing risk

  • Facilitating commercial card adoption and integration with company ERP/accounting systems to further unlock benefits of a commercial card program

Canadian firms are ready to modernize; they simply need the right tools and support.

The Path Forward

The Canadian middle market is entering a period defined by caution, complexity, and transformation. Firms are adapting to external pressures—pricing, inflation, supply chain disruptions—while investing in technology, talent, and digital payments to build resilience.

For banks and payment providers, the mandate is clear: deliver solutions that help firms operate more efficiently, manage risk more effectively, and unlock the power of digitization without adding complexity.

 

Joseph Migliacci  

Senior Director, Visa Commercial Services - Canada