Canadian Buy Now Pay Later Market Poised for Significant Growth
Toronto, Monday, 17 February 2025.
Canada’s Buy Now Pay Later market, valued at $7.5 billion in 2025, is projected to reach $11.32 billion by 2030, reflecting a robust annual growth rate of 8.6%.
Market Growth and Key Players
The Canadian BNPL sector has demonstrated remarkable momentum, achieving a CAGR of 19.7% from 2021 to 2024 [1]. Major players including Afterpay, Sezzle, Klarna, Affirm, and PayBright are actively shaping the competitive landscape through strategic partnerships and technological innovations [1]. This growth trajectory is particularly significant as it represents a shift in consumer payment preferences, with 50% of Americans having already adopted BNPL services [2].
Consumer Behavior and Market Dynamics
The sector’s expansion is driven by diverse consumer needs, with BNPL services being increasingly utilized across various categories. Recent data shows apparel (42%), electronics (32%), furniture (26%), and home appliances (22%) as the top financed categories [2]. Notably, Gen Z and Millennials are 50% more likely to use BNPL for experiences and personal travel [2]. The market’s evolution is further evidenced by its expansion into non-traditional sectors such as healthcare, education, and home improvement [1].
Regulatory Landscape and Future Outlook
The regulatory environment is undergoing significant changes. Following a report by Option Consommateurs in October 2024, there has been increased scrutiny to prevent unexpected fees in BNPL contracts [1]. The Financial Consumer Agency of Canada (FCAC) is actively working to improve consumer protection and transparency [1]. However, recent developments in the U.S., including the wind-down of Consumer Financial Protection Bureau operations in early February 2025, may influence the regulatory approach in North America [2].
Strategic Partnerships and Innovation
The market is witnessing significant strategic movements, with companies forming key partnerships to enhance their service offerings. For instance, Klarna’s integration with Apple Pay in October 2024 has expanded accessibility for BNPL purchases [1]. Small and medium-sized merchants are increasingly adopting these services through platforms like Shopify, demonstrating the sector’s growing reach across different business segments [1]. The industry continues to evolve with new domestic players like KOHO entering the market, offering tailored BNPL solutions for Canadian consumers [1].