Dublin, Feb. 04, 2026 (GLOBE NEWSWIRE) — The “Canada Buy Now Pay Later Business and Investment Opportunities Databook – 90+ KPIs on BNPL Market Size, End-Use Sectors, Market Share, Product Analysis, Business Model, Demographics – Q1 2026 Update” report has been added to ResearchAndMarkets.com’s offering.
The BNPL payment market in Canada is expected to grow by 16.5% on annual basis to reach US$9.53 billion in 2026. The buy now pay later market in the country has experienced robust growth during 2022-2025, achieving a CAGR of 24.2%. This upward trajectory is expected to continue, with the market forecast to grow at a CAGR of 12.0% from 2026-2031. By the end of 2031, the BNPL sector is projected to expand from its 2025 value of USD 8.18 billion to approximately USD 16.76 billion.
This report provides a detailed data-centric analysis of the Buy Now Pay Later (BNPL) industry in Canada, covering market opportunities and risks across a range of retail categories. With over 90+ KPIs at the country level, this report provides a comprehensive understanding of BNPL market dynamics, market size and forecast, and market share statistics.
Competition is expected to concentrate further around platform-embedded BNPL, bank-issued instalment solutions and a limited number of fintech providers. Over the next 2-4 years, regulatory guidance on disclosures and credit assessments is likely to increase compliance costs, favouring larger, well-capitalized players. Banks could strengthen their share by integrating credit limits and customer loyalty, while fintech providers can differentiate through approval rates and category-specific partnerships.
Current State of the Market
- BNPL in Canada operates within a concentrated competitive environment shaped by a few large fintech providers, major banks offering instalment features, and ecommerce platforms embedding BNPL into merchant checkout flows. The market’s reach is extending through platform-based distribution rather than standalone merchant integrations. Affirm remains a visible provider across ecommerce and travel categories, supported by integrations through Shopify, Adyen, and online travel agencies.
- Banks, including CIBC, TD Bank, and Scotiabank, continue expanding instalment options on card purchases, positioning themselves as regulated alternatives. Competitive intensity is influenced by merchants’ growing reliance on payment-service providers to streamline checkout routing and reduce operational friction.
Key Players and New Entrants
- Affirm maintains a leading role via partnerships with Shopify and large travel platforms. PayBright’s brand migration into Affirm has consolidated its presence across national retailers. PayPal’s Pay in 4 remains embedded among small and mid-sized merchants, supported by PayPal’s checkout footprint.
- Canadian banks are functioning as de facto entrants into BNPL through card-linked instalment plans, offering structured repayments under existing credit frameworks. No major new standalone BNPL fintechs entered the market over the past year, reflecting funding constraints and higher regulatory expectations.
Key Trends and Drivers
Platform partnerships extend BNPL reach across Canadian ecommerce
- BNPL is increasingly delivered through large ecommerce and payment platforms rather than only via individual merchant integrations. Affirm has deepened its role in Canada through partnerships: extending its relationship with Adyen so that Adyen’s Canadian merchants can offer Affirm’s bi-weekly and monthly instalments, and expanding its partnership with travel platform KAYAK so Canadian travellers can split flight, hotel, and car rental costs over time.
- Affirm has also renewed and expanded its multi-year partnership with Shopify, under which it becomes the exclusive provider of Shop Pay Installments in Canada, embedding BNPL directly into Shopify merchant checkouts. Merchants are using PSPs and ecommerce platforms as their primary route to payments innovation, favouring a single integration that can expose them to multiple BNPL options.
- Travel, electronics, home improvement and other mid-ticket categories see value in instalments for conversion and basket-size management, and platforms such as Shopify and KAYAK give BNPL providers instant access to these sectors at scale. For BNPL providers, rising acquisition costs and tighter funding make platform-based distribution more attractive than one-merchant-at-a-time sales.
- BNPL availability in Canada will be largely shaped by decisions made by platforms such as Shopify, Adyen, and major online travel agencies, rather than by individual retailers. A small number of BNPL providers that secure deep platform relationships (currently led by Affirm) are likely to capture a disproportionate share of BNPL volume, while smaller providers without major partnerships could find it harder to reach scale.
Card issuers reposition instalment plans as BNPL alternatives
- Major Canadian banks are promoting credit-card-linked instalment plans (e.g., CIBC Pace It, TD Payment Plans) that let cardholders convert eligible purchases into fixed monthly payments at a lower rate or fee than the revolving interest rate. These bank instalment features behave like a “closed-loop” BNPL: they are triggered at checkout or post-purchase, but remain on the bank’s balance sheet and within existing credit-card limits.
- Bank-issued instalment plans are likely to take a growing share of “BNPL-type” volumes, especially for higher-income and prime segments already engaged with major banks. Competition between fintech BNPL providers and banks will shift from pure access (who is present at checkout) toward cost of credit, transparency of terms, and how instalments are reflected in overall credit-card borrowing.
Supervisors tighten expectations on BNPL conduct and disclosure
- Canadian authorities are explicitly incorporating BNPL into their consumer protection and financial literacy agendas. In September 2025, the Financial Consumer Agency of Canada (FCAC) published a dedicated pilot study on BNPL use, highlighting that users are often younger and use the products for furniture, electronics, and clothing, while also reporting challenges in understanding the impact on credit scores, dispute resolution, and penalties.
- International bodies such as the OECD are also flagging BNPL in the context of digital credit and the need for clear consumer information, and FCAC is cited as a participating authority monitoring these developments. BNPL sits within a broader concern about household indebtedness and repayment risk. The Bank of Canada’s 2025 Financial Stability Report again highlights highly indebted households as a key vulnerability, noting that rising rates and economic uncertainty are increasing the risk of payment difficulties.
- As practices converge with other regulated credit products, BNPL may lose some of its reputation as a “light-touch” option, but will gain legitimacy with regulators, banks and merchants, supporting sustainable growth rather than rapid, unchecked expansion.
Household debt pressures shape cautious consumer use of BNPL
- BNPL usage in Canada is growing from a relatively small base and is primarily used by consumers as a budgeting tool rather than as a mass-market default payment method. The FCAC pilot shows that many BNPL users cite budgeting support, the inability to pay in full upfront, and avoiding interest as key reasons for using BNPL, but a majority of surveyed Canadians who are familiar with BNPL have not used it and prefer other payment methods.
- At the same time, recent data from the Office of the Superintendent of Bankruptcy show that, among insolvent consumers, credit-card debt is almost universal and substantial, underscoring the central role of traditional revolving credit in financial stress. Household credit remains high: Statistics Canada reports that by early 2025, total household credit liabilities exceeded C$3 trillion, with real-estate debt still growing and non-mortgage borrowing remaining significant.
- Higher living costs and interest rates have increased the appeal of structured, short-term repayment products, but the experience of credit-card-driven distress is making regulators, lenders and many consumers cautious about over-reliance on new types of credit. Education efforts from FCAC and other stakeholders emphasize that BNPL is a form of credit and should be incorporated into overall budgeting, tempering earlier perceptions of BNPL as a low-risk add-on.
- BNPL in Canada is likely to grow steadily but remain one component of a broader credit mix dominated by mortgages and credit cards; it is unlikely to displace cards in the short term. Growth may be strongest among younger, digitally active consumers who use BNPL for specific mid-ticket purchases rather than everyday small-ticket spending.
- If economic conditions soften or unemployment rises, regulators and lenders may further stress-test BNPL exposure in affordability assessments (e.g., for mortgages or larger loans), which could naturally limit over-extension and keep BNPL usage relatively measured.
Key Attributes:
| Report Attribute | Details |
| No. of Pages | 101 |
| Forecast Period | 2026 – 2031 |
| Estimated Market Value (USD) in 2026 | $9.53 Billion |
| Forecasted Market Value (USD) by 2031 | $16.76 Billion |
| Compound Annual Growth Rate | 12.0% |
| Regions Covered | Canada |
Companies Featured
- Affirm
- Afterpay
- Klarna
- Flexiti Financial
- PayPal
- Sezzle
For more information about this report visit https://www.researchandmarkets.com/r/sbwswm
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- Canadian Buy Now Pay Later Market
