UK regulator brings BNPL services under full consumer credit regulation

The UK’s Financial Conduct Authority (FCA) has decided to bring Buy Now Pay Later (BNPL) services nether afloat user recognition regularisation starting 15 July 2026.

The determination follows a authorities directive to grow regulatory oversight of the BNPL sector.

In July past year, FCA revealed plans to modulate the industry.

With the change, BNPL agreements volition autumn wrong the scope of the Consumer Duty.

Consumers utilizing these services are acceptable to person clearer accusation connected repayment terms, including owed dates, outgo amounts, and the implications of missing payments.

Firms offering BNPL products volition beryllium required to behaviour affordability checks earlier approving credit.

Lenders indispensable besides supply enactment to customers facing fiscal hardship and, wherever suitable, signpost them to escaped indebtedness advice.

Regulatory changes volition springiness consumers entree to the Financial Ombudsman Service for complaints relating to BNPL providers. The FCA has stated that each firms wishing to connection BNPL products volition request authorisation and tin expect pre-application guidance arsenic they hole for compliance.

FCA lawman main enforcement Sarah Pritchard said: “We privation the Buy Now Pay Later assemblage to thrive – it provides an important root of recognition to galore – and we volition proceed to enactment firms who privation to make innovative caller products.

“But crucially, nary 1 should beryllium lent to if they're incapable to repay, due to the fact that that could worsen their fiscal situation. Now Parliament has fixed america the powers, we’re putting successful spot proportionate protections for the 11 cardinal radical who usage it.”

Internationally, regulatory approaches vary. Last twelvemonth successful the US, the Consumer Financial Protection Bureau that classified bargain now, wage aboriginal providers arsenic recognition paper issuers.

"UK regulator brings BNPL services nether afloat user recognition regulation" was primitively created and published by Retail Banker International, a GlobalData owned brand.

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