As Canadians grapple with escalating living expenses, the appetite for Buy Now, Pay Later (BNPL) services is surging, according to recent statements from PayPal. The digital payments giant has revealed that its BNPL offering has expanded rapidly, reflecting changing consumer behaviours in a challenging economic landscape. In its earnings report for the fourth quarter of 2025, PayPal highlighted a notable increase in transaction volumes, indicating a robust demand for flexible payment options.
Strong Performance in 2025
In its latest earnings call, PayPal announced that its BNPL service recorded a staggering 20 per cent increase in total payment volumes compared to 2024, amounting to over $40 billion. Jamie Miller, PayPal’s Vice President and Chief Financial Officer, emphasised the significance of this growth, stating, “In Buy Now, Pay Later, we delivered over $40 billion in total payment volumes in 2025, growing more than 20 per cent year-over-year.” This growth is set against the backdrop of a total payment volume of $1.79 trillion across the platform, with BNPL transactions representing a little over two per cent of that figure.
Expanding Market Reach
Launched in 2020, PayPal’s BNPL service, also known as “Pay in 4,” allows consumers to divide their purchases into four equal payments over six weeks. This model has proven popular among users seeking to manage their finances more effectively. In 2025, the service expanded its reach by entering new markets, including Canada in November. PayPal’s move reflects a broader trend where BNPL services are increasingly becoming a staple in consumer finance, alongside competitors like Klarna and Affirm.
Consumer Considerations
While the BNPL model offers a more manageable way to handle larger purchases, it is not without its risks. Consumers who miss payments may incur penalties and fees, which could adversely affect their credit ratings, similar to the consequences associated with credit card debt. As the service gains traction, it is crucial for consumers to remain informed about these potential pitfalls.
Data from Salesforce further illustrates the growing popularity of BNPL services. During the holiday season, particularly from November 25 to November 30, the use of BNPL options nearly doubled compared to the previous year, indicating a significant shift in consumer purchasing behaviour.
Why it Matters
The rise of PayPal’s Buy Now, Pay Later service highlights a vital shift in consumer finance strategies as individuals seek more flexible payment solutions amid rising costs. This trend not only underscores the changing landscape of retail and e-commerce but also brings to light the importance of consumer education regarding financial products. As more individuals turn to BNPL, understanding the benefits and risks associated with such services will be essential to making informed financial decisions in an increasingly complex economic environment.
