As consumers struggle with the higher cost of living, including in Canada, PayPal says demand “continues to grow rapidly” for Buy Now, Pay Later to make purchases.
PayPal is a digital payments platform that allows businesses and consumers to send and receive money electronically, and the company reported its earnings results Tuesday for the fourth quarter of 2025, with a summary of the full year.
Companies that are publicly traded are required by law to report earnings results to investors to maintain transparency and accountability.
PayPal says 2025 saw its Buy Now, Pay Later payment option grow by 20 per cent compared with 2024 in terms of payment volumes — the amount of money flowing through the platform by businesses and consumers.
“In Buy Now, Pay Later, we delivered over [US]$40 billion in TPV [total payment volumes] in 2025, growing more than 20 per cent year-over-year,” Jamie Miller, vice-president and chief financial officer at PayPal, said in a conference call with investors after the earnings release.
“Our enterprise payments business returned to double-digit volume growth in the fourth quarter, and Buy Now, Pay Later continues to grow rapidly.”
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According to the earnings report, PayPal says its payment volumes in 2025 totalled $1.79 trillion, which means the use of Buy Now, Pay Later totalling $40 billion accounts for just over two per cent of that amount.
This means the use of Buy Now, Pay Later options, although a small portion of all payment options within PayPal, is growing fast.
PayPal launched its Buy Now, Pay Later option in 2020, which it also calls “Pay in 4,” because it allows users to split purchases into four equal payments over six weeks. A similar approach to Buy Now, Pay Later is used by other companies, including Klarna, Affirm and Sezzle.
PayPal’s Buy Now, Pay Later payment option expanded into other markets in 2025, including Canada in November.
Splitting up a payment over a longer period of time may make it easier for consumers to afford some purchases by breaking up larger price tags into more manageable amounts, but it comes with risks.
Customers who miss or are late on making payments could be hit with penalties and fees, and could even see their credit scores impacted, like with credit card debt.
Separate data from Salesforce, a sales, analytics and marketing platform, showed that the use of Buy Now, Pay Later during the holidays spiked. This included the “cyber week” period from Nov. 25 to Nov. 30, when the number of payments using the option nearly doubled compared with a year earlier.
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PayPal says Buy Now, Pay Later ‘continues to grow’ as consumers are pinched
