olaguera corcoran

The Dangers of Using Buy Now, Pay Later Platforms

Angela Olaguera-Corcoran had long admired the handcrafted gold filigree earrings from Cambio & Co., a Canadian small business that works with artists in the Philippines. She saw the earrings as a connection to her family’s heritage, and she liked the idea of supporting an independent, women-run business. But the price-tag was just out of reach—until, during the pandemic, the business started using the buy now, pay later, or BNPL, provider Sezzle. 

“I wasn’t able to drop $200 at a time, but I could break that up into payments of $50 [every] two weeks,” she says. “It made these pieces more affordable and accessible to me.” 

Olaguera-Corcoran is one of the 30 per cent of Canadians who are comfortable using BNPL for an online purchase. BNPL installment plans—a form of loan that allows consumers to break up one purchase into a series of smaller, interest-free payments over a set period of time—rapidly grew in popularity during the pandemic alongside the broader e-commerce boom. But while they’re an increasingly common payment option for retailers across Canada, experts say they pose risks, like encouraging debt and overspending to shoppers—especially younger ones who may have less financial knowledge. 

The rise of buy now, pay later platforms 

The BNPL trend started with Australian fintech company Afterpay in 2014, and has since boosted the fortunes of a growing number of start-ups. In 2017, Canada’s first BNPL platform PayBright launched in the country and international companies soon entered the market: Minneapolis-headquartered Sezzle became available in Canada in 2019, San Francisco-based Affirm in 2021, and in February, Swedish lender Klarna entered the Canadian scene. In June, Apple also announced the development of its own BNPL program through Apple Pay.

“There’s a lot of allure particularly from younger generations. They think, ‘Why would I pay the full

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  • August 22, 2022