Canada Buy Now Pay Later Services Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

Canada Buy Now Pay Later Services Market Trends and Insights

Surge in E-commerce Transactions

Online retail sales climbed to CAD 74 billion (USD 54.2 billion) in 2025, and 78% of Canadians shopped on the web, creating a structural pull for BNPL at checkout. Digital share of total retail advanced from 5.8% in 2019 to 7.2% in 2024, while mobile devices accounted for 40% of digital purchases, favoring one-click BNPL approvals for fashion, electronics, and home goods. The Bank of Canada observed that cards still dominate by value, yet 29% of cardholders revolve balances, highlighting appetite for interest-free alternatives. Shopify’s two-million-merchant base embeds BNPL in cart flows, and Moneris, Canada’s top acquirer, routes installment offers at scale. An NBER working paper estimated that BNPL raises merchant sales about 20%, prompting retailers to absorb discount fees of 2–6%.^{[1] National Bureau of Economic Research, “BNPL Impact on Merchant Sales Study,” nber.org}

Consumer Preference for Interest-Free Installments

The 35% APR ceiling, effective 2025 and climbing, household debt-service ratios redirect borrowers toward zero-fee BNPL plans that preserve cash flow. TransUnion recorded a 1.74% 90-day delinquency rate on non-mortgage credit in Q2 2024, up 22 bps year over year, while card balances grew 4.7%. FICO’s Q1 2025 dataset showed payment rates sliding to 47% and two-plus-miss rates on monoline cards reaching 6.3%. A PayPal poll found 60% of respondents willing to try BNPL if fees were absent, with strong interest in appliances and electronics. Millennials and Gen Z in Quebec and Alberta adopt faster after 2024 provincial disclosure rules clarified the total borrowing cost.

Increasing Merchant Adoption to Boost Conversion

Eighty-five percent of merchants surveyed by PYMNTS reported higher BNPL usage, and 40% already offer installment plans. Shopify and Affirm launched Shop Pay Installments nationally in summer 2025, giving two million storefronts instant access to plans ranging from 0% to 31.99% APR. Square added Afterpay to its terminals to extend BNPL in physical stores, and Lightspeed replicated the strategy in hospitality and specialty retail. PayPal’s November 2025 rollout of Pay in 4 across Home Depot, Sephora, and Ticketmaster underscored BNPL’s shift from a niche to baseline payment rail. Retailers without installment plans risk basket attrition to rivals that advertise flexible terms.

Integration with Open Banking and Real-Time Rails

Budget 2025 locked in phased open-banking rules, read access in 2025 and write access from mid-2027. RTR, scheduled for 2026, will clear instant account-to-account transfers, slashing card network fees for BNPL providers. Payments Canada invited fintechs to join RTR directly, bolstering reach. Interac’s November 2025 launch of KONEK, backed by the six largest banks, marked incumbents’ bid to safeguard payment flows ahead of open-banking write access. Nuvei’s May 2025 pact with Mastercard Move for rapid merchant payouts shows infrastructure convergence accelerating. Yet PIPEDA requires explicit consent for alternative data underwriting, tempering the scale speeds.

Regulatory Scrutiny by FCAC and Provinces

The Financial Consumer Agency of Canada mandated plain-language cost disclosures in 2024, while British Columbia’s Bill 19 and Quebec’s Bill 72 tightened advertising rules and added cooling-off periods, inflating compliance costs for smaller fintechs. The Retail Payments Activities Act extended Bank of Canada oversight to BNPL operators, layering operational risk, cybersecurity, and reporting standards.^{[2]Bank of Canada, “Real-Time Rail Infrastructure,” bankofcanada.ca} Budget 2025 introduced stablecoin and AML requirements, as well as a new Financial Crimes Agency, adding complexity for platforms experimenting with crypto payments. The 35% APR ceiling hit subprime-focused lenders such as Mogo, which warned of an 8–10% revenue dip in 2025. Altogether, enforcement is tightest in British Columbia, Quebec, and Ontario, squeezing margins and deterring new entrants.

Elevated Default Risk in Macro Slowdowns

FICO data showed payment rates at 47% in Q1 2025 and monoline card two-plus-miss delinquencies at 6.3%, revealing fragile consumer liquidity. TransUnion found 90-day non-mortgage delinquency at 1.74% in Q2 2024, with card balances still rising. The Bank of Canada notes that 29% of cardholders carry revolving balances, exposing them to rate shocks. Afterpay’s parent, Block, reported 96% on-time installment repayment but acknowledged sensitivity to Alberta’s commodity cycles. Affirm’s 96% repeat-customer ratio indicates loyalty among prime borrowers, yet first-time or subprime users pose higher loss risk in downturns. Providers are raising merchant discount rates and trimming credit limits to offset expected losses, which can dampen transaction growth for the Canada Buy Now Pay Later market.

Segment Analysis

By Channel: Mobile POS Drives In-Store Convergence

Mobile point-of-sale (mPOS) transactions are forecast to grow at a 22.1% CAGR from 2025 to 2030, chipping away at the 65.3% share that online checkouts commanded in 2024 within the Canada Buy Now Pay Later market. Square, Lightspeed, and Shopify POS integrate installment plans at physical tills, allowing retailers to replicate e-commerce flexibility in-store. PayPal’s Pay in 4 launch, spanning Home Depot and Sephora, underscores in-store demand for frictionless financing.  

In-store orders typically have higher average ticket values for furniture, appliances, and home improvements. Interac’s KONEK network, first deployed at Staples Canada, enables direct-from-bank payments that bypass card rails, hinting at future disintermediation of conventional BNPL providers. Younger shoppers in Vancouver and Toronto are increasingly using smartphone wallets at checkout, reinforcing omnichannel adoption and solidifying the Canada Buy Now Pay Later market footprint across sales channels.

Note: Segment shares of all individual segments available upon report purchase

By Enterprise Size: SMEs Narrow the Gap

Large enterprises controlled 72.8% of the Canada Buy Now Pay Later market share in 2024, yet SMEs are projected to expand 21.63% annually through 2030 as turnkey integrations lower entry barriers. Shop Pay Installments lets even micro-sellers activate financing without custom code, while Square’s Afterpay embed targets small retailers.  

PYMNTS found that 85% of merchants offering BNPL report higher usage, a conversion bump that resonates with fashion and electronics boutiques operating on thin margins. Moneris’ standardized BNPL APIs further democratize access across merchant tiers. As SMEs scale, the Canada Buy Now Pay Later market size for this cohort is expected to rise steadily, diversifying revenue beyond enterprise clients.

By End User: Healthcare Financing Unlocks Elective Demand

Consumer electronics led in 2024, accounting for 33.8% of the Canada Buy Now Pay Later market size, driven by high-ticket devices and rapid refresh cycles at Best Buy and Apple stores. Conversely, healthcare is set to expand at a 24.18% CAGR, the fastest among end users, driven by financing for dental, cosmetic, and fertility procedures ranging from CAD 500 to CAD 15,000 (USD 366–10,980).  

Humm Canada, LendCare, and Affirm doubled their healthcare merchant bases by partnering with clinics that pre-qualify patients to curb defaults. PayPal surveys show 31% of respondents are open to financing appliances and 26% electronics, but gaps in elective medical coverage suggest headroom for BNPL growth in clinics. As higher-ticket treatments migrate online, longer-tenor plans deepen penetration, expanding the Canada Buy Now Pay Later market.

Note: Segment shares of all individual segments available upon report purchase

By Payment Structure: Longer Tenors Gain Traction

Pay-in-4 plans held 47.02% of the Canada Buy Now Pay Later market share in 2024, favored for fashion, small electronics, and home goods. Pay-in-12 products are projected to grow at 22.51% CAGR through 2030 as consumers finance healthcare, furniture, and renovations.  

Royal Bank of Canada’s PayPlan and CIBC’s Pace It offer 36-month terms for prime customers, while Shopify-Affirm supports multiple tenor options at up to 31.99% APR. The 35% APR ceiling nudges subprime lenders out of longer-tenor space, concentrating growth among prime and near-prime borrowers. This structural tilt toward higher-value baskets expands the total Canada Buy Now Pay Later market revenue, even as unit volumes moderate.

Geography Analysis

Ontario leads the Canada Buy Now Pay Later market due to dense e-commerce volumes and early merchant integrations in the Greater Toronto Area. Quebec follows, propelled by French-language platforms that comply with Bill 96 and Bill 72 consumer-protection mandates, boosting trust and take-up. British Columbia ranks third, with Vancouver’s tech-savvy consumers fueling 22.1% CAGR in mPOS adoption.  

Alberta’s resource-linked economy produces higher income but also volatility; defaults rise during commodity downturns, tempering BNPL expansion yet sustaining longer-tenor demand among prime borrowers in Calgary and Edmonton. The rest of Canada, which includes Saskatchewan, Manitoba, the Atlantic provinces, and the territories, lags due to lower population density and fewer merchant integrations, although Shopify’s national footprint continues to expand, providing BNPL access.  

RTR and KONEK infrastructure investments concentrate initially in Ontario, Quebec, and British Columbia, where transaction volumes justify the costs. Statistics Canada reports that 14.8% of newcomers are credit-invisible, compared to 7.5% of native-born Canadians, a gap that BNPL helps bridge. Nova Credit’s ties with RBC, Scotiabank, and Equifax let immigrants port overseas histories, spurring adoption especially in Ontario and British Columbia landing points.^{[3]Statistics Canada, “E-commerce and Digital Economy Statistics 2025,” statcan.gc.ca}