The Canada buy now, pay later (BNPL) business report 2025–30 is expecting regulatory scrutiny, including from advocacy groups and organizations like the Financial Consumer Agency of Canada (FCAC), to intensify as the market matures.
In a news release, ResearchAndMarkets.com announced its new report titled “Canada Buy Now Pay Later Business and Investment Opportunities Databook - 75+ KPIs on BNPL Market Size, End-Use Sectors, Market Share, Product Analysis, Business Model, Demographics - Q1 2025 Update.”
Canada’s BNPL payment market, which is a $7.5-billion industry, is swiftly evolving, with driving factors including innovation, rising adoption across diverse sectors, the entry of domestic players, and stricter regulatory oversight, the news release said.
Key competitors including Afterpay, Sezzle, Klarna, Affirm, and PayBright are utilizing strategic partnerships and technological innovations to strengthen their positions within the BNPL sector, the news release added.
From 2021–24, Canada’s BNPL industry saw robust growth and attained a 19.7-percent compound annual growth rate (CAGR). With this growth, the sector has the potential to redefine payment preferences across the country’s retail and non-retail industries, the news release said.
The report projected that Canada’s BNPL market would grow by 12 percent annually and reach US$7.50 billion this year. The report expected this upward trend to continue, with consumer demand for flexible payment options and the expansion of e-commerce helping to sustain this growth.
The report projected a 8.6-percent CAGR from 2025–30, with Canada’s BNPL industry to expand from US$6.69 billion in 2024 to about US$11.32 billion by the end of the 2025–30 period.
The report expected that, over the next two to four years, greater consolidation, technological growth, and diversification into non-traditional sectors like healthcare, education, and home improvement would shape the competitive landscape in Canada’s BNPL market.
Bigger players could potentially acquire smaller providers to attain economies of scale and to broaden their offerings, the report added.
Regulatory landscape
Regulatory trends in the US, Europe, and other international markets are influencing Canada
to address similar risks to ensure that its practices align with global standards, with local regulators
taking proactive steps to tackle concerns about consumers overextending their finances, said the news release of ResearchAndMarkets.com.
Canada’s BNPL industry has faced greater regulatory scrutiny over the past year, the news release said. Last October, Quebec-based consumer rights group Option Consommateurs issued a report titled “Buy Now, Pay Later: Assessment of Risks and Remedies.”
The October report raised questions about the lack of clarity in BNPL agreements and the potential for consumers to incur unexpected fees. The report urged governments to regulate BNPL services to safeguard consumers.
Stricter regulatory measures seek to ensure transparency in BNPL contracts, to support a more sustainable and trust-driven industry, and to encourage providers to implement robust credit assessments and clear disclosure practices, the news release said.
However, these more stringent measures can potentially limit the operations of smaller players that cannot meet compliance costs, can give bigger players a competitive advantage, and can set new industry standards for transparency and responsibility, the news release noted.
Heightened regulatory scrutiny at the FCAC aims to protect consumers from over-indebtedness, to tackle concerns about financial vulnerability, to increase transparency in fees and repayment terms, and to better understand consumer behavior and the possible risks associated with BNPL services, the news release said.
The new report urged senior executives to closely monitor regulatory developments and strategic partnerships to be better equipped to take advantage of opportunities and to mitigate risks within this rapidly evolving industry.
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