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 - Q2 2024 Update

The BNPL payments in the country are expected to grow by 14.6% on an annual basis to reach US$6.69 billion in 2024.

The medium to long-term growth story of the BNPL industry in the country remains strong. BNPL payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 9.5% during 2024-2029. The BNPL gross merchandise value in the country will increase from US$5.84 billion in 2023 to reach US$10.55 billion by 2029.

Key Developments in the BNPL Sector in Canada

The Buy Now Pay Later (BNPL) sector in Canada has seen notable product launches and innovations aimed at enhancing consumer experience and expanding market reach. Here are the key highlights:

Product Launches and Innovations

Apple Pay Later: Apple introduced its BNPL service, allowing users to split purchases into four interest-free payments. This integration into Apple Pay streamlines the payment process for users shopping online and in-app, marking a significant entry of a tech giant into the BNPL space.

Affirm's Expansion: Affirm has expanded its partnerships with various retailers, enhancing its BNPL offerings. This includes new features that allow consumers to manage their payments more effectively and access personalized financing options.

Klarna's New Features: Klarna has launched features aimed at improving user engagement, such as personalized shopping experiences and enhanced budgeting tools. These innovations are designed to help consumers manage their finances better while using BNPL services.

Afterpay's Integration with Retailers: Afterpay has expanded its integrations with major Canadian retailers, allowing for more seamless checkout experiences. This includes offering exclusive deals and promotions for users who utilize BNPL at participating merchants.

Strategic Partnerships

Affirm and Shopify: Affirm partnered with Shopify to provide BNPL solutions to Shopify merchants. This collaboration allows merchants to offer Affirm's flexible payment options directly at checkout, enhancing the shopping experience for consumers.

Klarna and Canadian Retailers: Klarna has formed partnerships with various Canadian retailers, including major brands in fashion and electronics. This integration allows consumers to use Klarna's BNPL services seamlessly, driving sales for retailers while providing customers with flexible payment options.

Afterpay and Amazon: Afterpay expanded its partnership with Amazon, enabling customers to use BNPL options for purchases on the platform. This move taps into Amazon's vast customer base and enhances Afterpay's visibility in the e-commerce space.

Zip and Visa: Zip announced a partnership with Visa to enhance its BNPL offerings. This collaboration allows Zip to leverage Visa's extensive network, improving transaction security and expanding its acceptance among merchants.

The partnerships in the BNPL sector are on the rise as companies collaborate with retailers and payment networks to provide flexible payment solutions. This strategic alignment is vital as the market grows due to increasing consumer demand for BNPL services.

Mergers and Acquisitions

Focus on Financial Services: While specific mergers or acquisitions in the BNPL sector were not highlighted, the broader financial services landscape is witnessing significant interest. For example, the Royal Bank of Canada's acquisition of HSBC Canada for CAD 13.5 billion received federal approval and is set to close soon, reflecting a trend of consolidation within the financial sector that could influence BNPL players as well.

Potential Future Deals: Analysts suggest that as the economic environment stabilizes, particularly with a focus on critical sectors like technology and financial services, there may be more opportunities for M&A in the BNPL space. Companies may look to consolidate or expand their offerings through strategic acquisitions to enhance their competitive positions.

The BNPL sector in Canada has seen limited merger and acquisition activity. Anticipated economic improvements may lead to increased M&A activity soon. Companies in this sector could pursue strategic partnerships or acquisitions to capitalize on the growing demand for BNPL services.

Regulatory Changes

Increased Regulatory Scrutiny: The Financial Consumer Agency of Canada (FCAC) has been actively monitoring the BNPL industry, focusing on consumer protection measures. This includes ensuring that BNPL providers comply with existing credit regulations and that consumers are adequately informed about the terms and conditions of their financing options.

Proposed Regulations: There have been discussions around implementing new regulations specifically tailored for BNPL services. These regulations may include requirements for clearer disclosures regarding fees, interest rates, and repayment terms, aimed at preventing consumer debt accumulation and enhancing transparency in the BNPL market.

Consumer Protection Initiatives: The Canadian government has expressed intentions to enhance consumer protection laws, which may extend to BNPL services. This could involve mandating that BNPL providers conduct credit assessments before offering their services, similar to traditional lending practices.

Monitoring Market Practices: The FCAC is also focused on monitoring market practices to ensure that BNPL providers are not engaging in predatory lending practices. This includes scrutinizing marketing strategies and the targeting of vulnerable consumer segments.

The BNPL sector in Canada is facing increased regulatory scrutiny as authorities aim to balance consumer protection with financial innovation. Potential new regulations and enhanced oversight reflect the growing significance of BNPL in the Canadian market. These developments are crucial for shaping the future of BNPL services in Canada to prioritize consumer interests.

The BNPL sector in Canada is experiencing dynamic growth driven by significant product innovations, strategic partnerships, and expanding market presence. Major players like Apple, Affirm, Klarna, and Afterpay are enhancing consumer experiences through new features and retailer integrations. While the sector has seen limited mergers and acquisitions thus far, potential economic improvements may spur future consolidation. Regulatory scrutiny is increasing, with the Financial Consumer Agency of Canada focusing on consumer protection and transparency. As the BNPL landscape evolves, balancing innovation with regulatory compliance will be crucial for sustaining growth and ensuring consumer trust.

The BNPL payment industry in Canada has recorded strong growth over the last four quarters, supported by increased e-commerce penetration.

This report provides a detailed data-centric analysis of the Buy Now Pay Later (BNPL) industry, covering market opportunities and risks across a range of retail categories. With over 75 KPIs at the country level, this report provides a comprehensive understanding of BNPL market dynamics, market size and forecast, and market share statistics.

It breaks down market opportunities by type of business model, sales channels (offline and online), and distribution models. In addition, it provides a snapshot of consumer behaviour and retail spending dynamics. KPIs in both value and volume terms help in getting an in-depth understanding of end market dynamics.

The publisher’s research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.

Scope

This report provides in-depth, data-centric analysis of Buy Now Pay Later industry in Canada through 55 tables and 71 charts. Below is a summary of key market segments:

Canada BNPL Market Size and Spending Pattern, 2020-2029

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

Canada Buy Now Pay Later Revenue Analysis, 2020-2029

• Buy Now Pay Later Revenues
• Buy Now Pay Later Share by Revenue Segments
• Buy Now Pay Later Revenue by Merchant Commission
• Buy Now Pay Later Revenue by Missed Payment Fee Revenue
• Buy Now Pay Later Revenue by Pay Now & Other Income

Canada Buy Now Pay Later Operational KPIs & Statistics, 2020-2029

• Buy Now Pay Later Active Consumer Base
• Buy Now Pay Later Bad Debt

Canada BNPL by Purpose, 2020-2029

• Convenience - Short Term Loans
• Credit - Long Term Loans

Canada BNPL by Business Model, 2020-2029

• Two-Party (BNPL offered by retailers)
• Three-Party BNPL Offering

Canada BNPL by Merchant Ecosystem, 2020-2029

• Open Loop System
• Closed Loop System

Canada BNPL by Distribution Model Analysis, 2020-2029

• Standalone
• Banks & Payment Service Providers
• Marketplaces

Canada Buy Now Pay Later Market Share Analysis by Key Players

Canada BNPL Analysis by Channel, 2020-2029

• Online Channel
• POS Channel

Canada Buy Now Pay Later in Retail Shopping: Market Size and Forecast, 2020-2029

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

Canada Buy Now Pay Later in Home Improvement: Market Size and Forecast, 2020-2029

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

Canada Buy Now Pay Later in Travel: Market Size and Forecast, 2020-2029

• Gross Merchandise Value Trend Analysis
• Average Value per Transaction Trend Analysis
• Transaction Volume Trend Analysis

Canada Buy Now Pay Later in Media and Entertainment: Market Size and Forecast, 2020-2029

• Gross Merchandise Value Trend Analysis
• Average Value per Transaction Trend Analysis
• Transaction Volume Trend Analysis

Canada Buy Now Pay Later in Services: Market Size and Forecast, 2020-2029

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

Canada Buy Now Pay Later in Automotive: Market Size and Forecast, 2020-2029

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

Canada Buy Now Pay Later in Healthcare and Wellness: Market Size and Forecast, 2020-2029

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

Canada Buy Now Pay Later in Others: Market Size and Forecast

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

Canada Buy Now Pay Later Analysis by Consumer Attitude and Behaviour

• Sales Uplift by Product Category
• Share by Age Group
• Share by Income
• Share by Gender
• Adoption Rationale
• Average Monthly Expense segments

Reasons to buy

• Gain a thorough grasp of the dynamics of the industry for Buy Now Pay Later: Determine key trends, market opportunities, and projections for the years 2020-2029. To keep on top of the game, utilise critical KPIs such as volume, average value per transaction, and gross merchandise value to understand market trends.
• Get market dynamics by end-use sectors and assess new prospects across various end-use sectors to quickly stay up to date on the most recent and impending developments in BNPL markets.
• Market-specific strategies include identifying growth areas that are concentrated on particular opportunities and using our unique combination of quantitative forecasting and cutting-edge insights to analyse market-specific risks and significant trends in the BNPL sector.
• Learn about the attitudes and behaviours of consumers: This study uses information from a proprietary survey to identify and interpret key Buy Now Pay Later KPIs, such as spending by age, gender, and income level.
• Create profitable and proactive business plans by utilising market research and a forward-looking study of BNPL market spend and significant prospects in Canada.