Canadians are increasingly turning to buy now, pay later (BNPL) services to afford groceries as food prices remain elevated, according to data from the financial app PayPlan. The company reported a 40% increase in BNPL transactions at grocery stores in the second quarter of 2026 compared to the same period last year.
Rising reliance on deferred payment
PayPlan's analysis shows that the average grocery transaction using its BNPL service was $87, up from $72 a year ago. The app allows users to split purchases into four interest-free installments. Chief executive Sarah Mitchell said, 'Canadians are using our service not just for big-ticket items but for everyday essentials like food. It's a sign of the financial strain many households are under.'
The trend aligns with Statistics Canada data showing food prices rose 3.8% year-over-year in May 2026, outpacing overall inflation of 2.5%. Dairy, meat, and fresh vegetables saw the steepest increases.
Consumer debt concerns
Financial experts warn that relying on BNPL for groceries could lead to a debt trap. 'It's a short-term fix that can create long-term problems if not managed carefully,' said Ahmed Hassan, a senior economist at the Consumer Debt Institute. He noted that BNPL usage among low-income households has doubled since 2024.
PayPlan, however, emphasizes that its service includes spending limits and reminders to help users avoid late fees. The company also reported that 95% of its grocery BNPL payments are made on time.
Industry response and alternatives
Major grocery chains like Loblaws and Sobeys have partnered with BNPL providers to offer the option at checkout. A Loblaws spokesperson said, 'We want to provide flexibility for our customers. This is one of many payment options we offer.'
Meanwhile, some consumer advocacy groups are calling for tighter regulations on BNPL services. The Canadian Consumer Finance Association has proposed a voluntary code of conduct that includes clear disclosure of fees and credit checks.
As Canadians continue to grapple with high grocery costs, the use of BNPL is expected to grow. PayPlan projects a further 25% increase in grocery transactions during the third quarter.
