Fact: Independent research from FICO (2025), analyzing data from more than 500,000 BNPL users, found that over 85 percent of consumers experienced a credit score change of less than plus or minus 10 points after using a BNPL product. This indicates that the vast majority of BNPL users manage their installment obligations without material financial stress or deterioration in credit standing.

BNPL products are structured around fixed repayment schedules, with clearly defined installment amounts, due dates, and automated payment reminders. These design features reduce the risk of balance accumulation and support predictable cash flow management, in contrast to revolving credit products where balances can compound over time.

In Canada, BNPL providers operate within federal and provincial consumer protection and credit reporting frameworks, which require transparent disclosure of terms, fair treatment of consumers, and responsible lending practices. These regulatory requirements reinforce clarity and accountability across the BNPL lifecycle.

BNPL is also increasingly recognized as a financial inclusion tool, particularly for thin-file or new-to-credit consumers. When repayment data is reported responsibly and incorporated into credit files, BNPL can support the development of positive credit history rather than contribute to over-indebtedness.

Bottom line:
Evidence does not support the claim that BNPL leads to widespread loss of control or debt accumulation. For most consumers, BNPL functions as a structured, manageable payment option that supports budgeting discipline and responsible credit use.

Fact: BNPL adoption spans all income segments and is most commonly used by financially active consumers seeking transparency, budgeting control, and short-term payment flexibility for defined purchases. Available data and industry experience do not support the characterization of BNPL as a product designed to target financially vulnerable consumers.

According to insights shared by Blakes and Equifax during Canadian Lenders Association roundtables, the average BNPL transaction value in Canada typically ranges between $100 and $300. These transactions are generally tied to specific retail purchases, such as household goods, electronics, or travel, rather than revolving or open-ended credit use.

BNPL differs structurally from traditional unsecured revolving credit. Transactions are installment-based, fixed in duration, and fully amortizing, which limits balance accumulation and supports predictable repayment.

Credit reporting and data harmonization:
Ongoing data harmonization initiatives led by FICO, Equifax, and TransUnion highlight that consistent BNPL repayment behavior can contribute positively to a consumer’s credit profile, particularly for individuals with limited or emerging credit histories. When BNPL data is incorporated within standardized reporting frameworks and paired with affordability assessments, it can support responsible credit-building rather than credit dependency.

Bottom line:
When deployed within clear affordability assessments, transparent disclosures, and responsible data-sharing frameworks, BNPL functions as a credit bridge, not a debt trap. It provides consumers with structured, short-term financing for discrete purchases and can support broader financial inclusion without encouraging unsustainable borrowing.

Fact: BNPL adoption among younger Canadians reflects a deliberate shift in financial behaviour, not exploitation. Younger consumers are increasingly avoiding revolving, high-interest credit cards and are choosing installment-based payment products that offer fixed repayment schedules, upfront cost visibility, and no compounding interest when paid on time.

BNPL use among younger adults is driven by preference for transparency and control, not lack of understanding. Research consistently shows that younger consumers actively compare payment options and favor products that provide predictable repayment structures and clearer budgeting outcomes.

Consumer safeguards in Canada include:

• Age eligibility requirements, with BNPL products restricted to consumers 18 years or older
• Use of soft credit checks, income signals, or open banking tools to support affordability assessment without harming credit scores
• Marketing practices that exclude minors and avoid youth-targeted financial inducements

Industry commitment to financial literacy:
The Canadian Lenders Association supports financial literacy initiatives that integrate BNPL education into broader budgeting, cash-flow management, and credit-building resources. These efforts emphasize responsible use, repayment awareness, and informed decision-making, particularly for new-to-credit and younger consumers.

Bottom line:
BNPL does not target inexperienced consumers. It responds to a generational demand for transparent, structured alternatives to revolving credit, supported by age safeguards, affordability checks, and ongoing financial education.

Fact: BNPL providers generate the majority of their revenue from merchant partnerships, not consumer fees. Merchants voluntarily pay a transaction fee because BNPL has consistently been shown to increase conversion rates, raise average order value, and improve customer satisfaction. For consumers, BNPL products typically feature fixed repayment schedules, upfront disclosure of amounts owed, and no interest when payments are made on time.

Evidence from North American merchants and consumers:

• 60 percent of retailers report higher sales after adding BNPL
  Source: Stripe, Testing the Impact of Buy Now, Pay Later on Conversion and Revenue
  Stripe reports that BNPL options materially increase checkout conversion and average order value for merchants.
  https://stripe.com/blog/testing-the-impact-of-buy-now-pay-later

• Approximately 70 percent of consumers say BNPL is clearer or easier to manage than credit cards
  Source: Afterpay Consumer Research, 2024
  Afterpay research shows a strong majority of users prefer BNPL for its predictable payments and avoidance of revolving interest.
  https://newsroom.afterpay.com/updates/nearly-half-of-bnpl-consumers-prefer-pay-in-4-over-credit-cards-as-they-look-for-more-choice-at-checkout

Regulatory context in Canada:
Canadian BNPL providers are subject to provincial consumer protection laws and applicable federal financial conduct requirements, which mandate clear disclosure of pricing, repayment schedules, and any applicable late fees. These requirements support transparent presentation of terms at checkout and throughout the repayment period, reinforcing consumer understanding and protection.

Bottom line:
The characterization of BNPL as relying on hidden fees or fine print is outdated and inaccurate. The BNPL business model is primarily merchant funded, highly transparent by design, and increasingly governed by clear consumer disclosure standards in Canada.

Fact: BNPL providers operating in Canada are subject to multiple overlapping regulatory frameworks, depending on their business model, activities, and provincial jurisdiction. While the regulatory perimeter continues to evolve, BNPL is already captured by existing payment, consumer protection, and financial conduct regimes.

Key regulatory frameworks include:

• Retail Payment Activities Act (RPAA):
  Under the RPAA, payment service providers that perform regulated payment functions must register with the Bank of Canada and comply with operational risk management and safeguarding requirements. The Bank of Canada began publishing a public registry of registered payment service providers in September 2025, which is updated on an ongoing basis.
• Provincial consumer protection legislation:
  Provincial Consumer Protection Acts apply to credit, leasing, and installment-based arrangements, including BNPL products where in scope. These statutes govern disclosure requirements, contract terms, remedies, and consumer rights, ensuring transparency and fair treatment.
• Federal AML, privacy, and fair dealing requirements:
  Where applicable, BNPL providers are subject to federal obligations related to anti money laundering, privacy protection, and fair dealing, including requirements under FINTRAC-administered regimes and privacy legislation.
• Industry standards and international benchmarks:
  In addition to statutory oversight, BNPL providers increasingly align with industry codes of conduct that serve as global benchmarks for responsible practice, such as Australia’s AFIA BNPL Code. These frameworks emphasize affordability assessment, transparency, marketing standards, and consumer safeguards.

In Canada, the Canadian Lenders Association and its members are working proactively with regulators, credit bureaus, and industry stakeholders to advance best practices for data transparency, consumer protection, and credit inclusion as BNPL continues to mature.

Bottom line:
BNPL is not unregulated. It operates within existing regulatory frameworks and is part of a fast evolving financial ecosystem that is actively aligning with responsible lending standards in Canada and internationally.