PayPal’s a fintech dinosaur, and its days are numbered, right? Actually, that statement couldn’t be further from the truth. In fact, PayPal still dominates the international transfer market and the online shopping market in many countries worldwide, including Canada, with no signs of slowing down. Yes, it has its competitors, and two of them are closing in on some of PayPal’s territory, but is it enough to force PayPal to depart Canada? It’s highly unlikely. Here’s why.
PayPal arrived in Canada in 2006, eight years after it launched in the US. Canadians were already familiar with P2P transfers thanks to Interac (more on that below), but PayPal had a slightly different market and quickly dominated the e-commerce scene.
By 2024, approximately 80% of Canadian internet users who make online payments had used PayPal within the past 12 months. Additionally, about 30% of Canadians have used PayPal for in-store payments at point-of-sale terminals.
The primary reason PayPal became such a success in Canada is due to its comprehensive buyer protection. Most of its competitors offer this in some form, but it’s never as robust as PayPal’s. The other reason Canadians adopt PayPal is the added security of it being email-based, so no direct card information is provided to merchants.
When it comes to international transfers, PayPal has its competition beaten purely by the fact that it can process transactions in over 25 currencies.
However, two significant factors put PayPal slightly behind its competitors, the first being the transaction speed. While many of the others are instant, PayPal bank transfers can take 1–3 business days, unless you’re prepared to pay an additional 1% fee to make it same day. The other, perhaps bigger issue, is its unfavourable exchange rates. While most competitors have a markup of about 2.5%, PayPal’s is over 4% plus extra fees. Despite these, it’s still a market leader, which speaks a lot for consumer trust and confidence.
PayPal is used to pay for a myriad of things online that Canadians favour, including:
• Subscriptions: Netflix, Disney+, Spotify and Patreon can all be paid for by PayPal—just set and forget.
• Travel: Book your travel via Expedia, Booking.com, Airbnb, and even Uber using PayPal.
• Cross-border online shopping: eBay, Amazon, Etsy, and AliExpress all accept PayPal.
• Entertainment/gaming: Use PayPal for Steam, Twitch, Epic Games, Xbox, and PlayStation Stores; there are even Canadian casinos with PayPal as a deposit option.
PayPal is a market leader in Canada, but it does have some stiff competition, and while there are some things it does better, in some ways it falls short.
Interac was there first. It’s been part of the digital banking scene in Canada since its inception in 1984. In that time, it has become Canada’s premier domestic P2P transfer system, with 88% of Canadians having used it. It processes over 20 million instant transactions daily and achieves 92% market penetration.
Two places where it falls short and PayPal picks up the slack are in international transactions and online shopping, as Interac was never designed for that. Also, once an Interac transaction has been processed, it can’t be reversed; there’s no buyer protection or chargebacks.
Closing in on PayPal’s popularity in Canada is Apple Pay. In 2025, it had 42% penetration among payment service users, and it’s estimated that around 18% of all Canadian consumers use Apple Pay. It’s most commonly used for in-store purchases, a market PayPal struggles to compete in, with in-store user penetration among digital wallet holders often exceeding 50%. Apple Pay is closing in on PayPal’s online shopping dominance, too, but has room to grow.
Apple Pay is a strong competitor for PayPal, limited only by the fact that it’s only available on iOS devices (PayPal is available on all operating systems) and that its buyer protection features are limited. International transactions, while having a cheaper fee of 2.5%, are conducted in line with whatever bank’s card is linked to the wallet. P2P transfers via Apple Cash are available in the US only, so Interac and PayPal have that market cornered.
Google Pay hasn’t had the uptake in Canada that Apple Pay has yet. However, approximately 30% of Canadian consumers have used Google Pay for payments, which represents millions of users across the country. It’s popular for in-store purchases and can be used on all Android devices.
Like Apple Pay, Google Pay’s international transaction markup is only 2.5% (compared to PayPal’s 4+%), so it wins there. Google Pay once had a P2P option, but it was discontinued in 2024 and was never available in Canada.
Why is PayPal going to survive in a competitive market? The answer is straightforward: it doesn’t need to win every category—it just needs to remain the “good enough” option across multiple use cases, and that’s what it does.
For starters, it’s the only wallet that works on every operating system (Android, iOS, and web) and in over 200 countries. Its robust buyer protection policies are some that mobile wallets can’t replicate. It’s in a unique position as it handles online commerce, in-store purchases, and peer-to-peer transactions.
With 88% countrywide dominance, Interac wins with local P2P transfers, and PayPal will never be able to topple that because Interac’s 40-year hard start is too long. Meanwhile, the in-store mobile race is between Apple Pay and Google Pay, as the speed of transactions keeps PayPal out of the running.
Even though PayPal’s international transaction fees are higher and can take longer, it still holds the lion’s share of those transactions, and that needs stronger competition in the marketplace.
Photo: Marques Thomas on Unsplash
