Canadians Turn to ‘Buy Now, Pay Later’ Amid Economic Strain

UPDATE: As inflation pressures mount, Canadians are increasingly turning to ‘buy now, pay later’ (BNPL) services to manage their finances, according to a new report from R&M. This trend raises serious concerns about the long-term financial implications for consumers.

With the cost of living rising sharply, experts warn that while BNPL can provide immediate relief by spreading payments over time, it can also lead to significant debt if not managed carefully. “It’s on every single retail website, and if one is not disciplined, it’s easy to get hooked,” cautioned Stacy Yanchuk Oleksy, CEO of the Edmonton-based non-profit credit counseling agency Money Matters.

Statistics reveal a dramatic surge in BNPL usage. By the end of 2025, the Canadian market for BNPL services is projected to expand by 12% annually, reaching an astonishing US$7.5 billion, as reported by R&M. Just two years ago, BNPL loans facilitated only 2% of total e-commerce sales; this figure is set to double to 6% by 2024, according to Morgan Stanley.

The trend is not limited to high-ticket items. Many Canadians are increasingly using BNPL for everyday purchases, including groceries and takeout. A recent survey by the fintech firm Koho indicated that the percentage of users opting for BNPL jumped from 38% to 44% in just six months. The average transaction amount was reported at $187, with loans averaging $345.

While BNPL can serve as a tool to avoid high credit card interest rates, it poses risks. Oleksy warns, “If you miss a payment, that’s when the interest tacks on.” The urgency is palpable, especially with recent findings showing that 1.4 million Canadians missed credit card payments in the last quarter of April, May, and June 2025, a stark increase of 118,000 from the previous year.

Financial planners like Kelly Ho emphasize that discipline is key. “If you have multiple BNPL agreements for several items, it can become overwhelming to track,” Ho explained. She suggests reserving BNPL for larger purchases to avoid falling into a debt trap.

As the back-to-school shopping season approaches, financial experts urge parents to plan ahead rather than relying on BNPL for school supplies. “Planning in advance is key,” Ho stated, advising families to save money for upcoming expenses instead of resorting to BNPL loans.

With so many Canadians feeling the financial squeeze, the rise of BNPL services is both a relief and a cautionary tale. As the landscape shifts, consumers must navigate these options carefully to avoid future financial strain.

Stay tuned for further updates on this developing story as more data emerges on the impact of BNPL in Canada.