‘Buy now pay later’ not as convenient as it seems

Dear Money Lady Readers,

Have you been offered a BN-PL option at a store self-checkout or when shopping online?

It’s the latest thing this fall, offered by retailers, whether you’re buying household goods, car parts or even groceries. So, what is it you ask?

BN-PL stands for “buy now pay later” and is a new stream of business almost all financial institutions are getting involved in for 2026. With the rising cost of practically everything these days, banks, credit unions and even smaller companies that offer point-of-sale (POS) services have now realized there is an opportunity to capitalize on Canadians who are struggling.

Of course, you know how this works, right? At the time of purchase, when prompted to pay, you will be given the option to defer the payment, “taking the merchandise with you now” and then agreeing at the POS terminal to “pay for it sometime in the future.” Voila, you get to defer the responsibility of payment!

Now some of you may be saying “Well Chris, I can do that with my credit card.” Sure, you can. But a BN-PL plan is for debit or cash, too. Some banks are now pre-authorizing debit cards and bank accounts to allow you to pay for purchases in installments, with the first payment sometimes due at the checkout and the rest auto-charged to your debit card/account over the next few weeks (usually in two-week intervals) or months.

These aren’t small companies behind this new phenomenon. Moneris is now the biggest proponent of BN-PL through its POS terminals and solutions, and it is owned jointly by Royal Bank and Bank of Montreal. Moneris calls it a one-time recurring payment plan, while RBC pitches it to small businesses as a way to “grow your business, and give your customers a better shopping experience.” RBC says to small businesses: “Turn more browsers into buyers with little effort. There’s no development work on your part and PayPlan by RBC will easily integrate into your existing site.”

As you can probably tell, I disagree with a buy-now and pay-later model for small retail. It’s one thing to offer it with big ticket items such as furniture, cars, boats, motorcycles and homes; it’s quite another to offer it for small household purchases, such as a toaster, or basics, like groceries and pet food. Will we ever get out from under our debt to retire comfortably? Apparently, the financial institutions would rather we don’t, as this sounds like another creative way to get people continuing to borrow. All lenders know that loans and mortgages are their biggest money-making machines and when people are struggling why not make it easier for them to borrow even more?

Banks know that if Canadians have a lot of open credit and when they can’t handle it, they will most likely amalgamate it into a consolidation loan or at the time of a mortgage renewal. Having been in banking for over 35 years and seen the before and after of the 2008 financial crisis, I can say this feels like the times before that crisis, when banks and lenders were eager to showcase new clever and inventive products to entice us all to carry more credit.

Please be careful with your money. Make it a habit to stick to a written financial plan or budget and try to resist spending too much as we go into the holiday season. If you would like help with creating a new 2026 financial plan, I now offer one-on-one personalized and confidential money coaching. You can find out more on my website or drop me an email at coaching@askthemoneylady.ca