What BNPL regulation means for retailers and how to prepare for July 2026

Deferred Payment Credit (DPC), commonly known arsenic Buy Now Pay Later, has go a acquainted portion of the retail checkout experience. For galore user brands, it helps thrust conversion, summation handbasket sizes and connection customers greater flexibility. But from 15 July 2026, the instauration of FCA regularisation volition alteration however these products are offered, creating caller challenges and opportunities for some lenders and retailers.
Over the past fewer years, DPC has grown much fashionable for UK consumers looking to dispersed the outgo of purchases and negociate their monthly budgets. According to the Financial Conduct Authority (FCA) Financial Lives 2024 Survey, 1 successful 5 adults (10.9 million) bought goods utilizing DPC successful the 12 months to May 2024, up from 17% (8.8 million) successful 2022.

Until recently, DPC remained mostly unregulated successful the UK. As a result, consumers did not payment from immoderate of the protections associated with different regulated retail concern products, including affordability checks and entree to autarkic quality resolution. The caller rules volition present stricter affordability checks astir however DPC is offered. In practice, this could mean less shoppers being approved, much steps astatine checkout, and a displacement successful however – and however often – radical take to usage it.

For retailers, the situation is not simply knowing the caller rules but managing what comes next: balancing further friction successful the lawsuit travel with continued lawsuit request for flexible ways to pay.

The retail concern exemplary astatine the constituent of merchantability

For user brands, retail finance, including DPC, offers important advantages, driving higher income volumes, expanding bid values and helping customers entree greater outgo flexibility. More commonly, brands spouse with third-party fiscal institutions, which wage the retailer upfront connected behalf of the lawsuit and past cod repayment from the lawsuit implicit time, often successful instalments.

As DPC comes nether FCA regulation, these partnerships volition travel nether greater scrutiny. Retailers volition request assurance that their chosen providers tin conscionable caller regulatory requirements portion continuing to present a creaseless lawsuit acquisition and enactment commercialized objectives.

What tin we expect from the caller requirements?

The caller DPC regulations volition found clearer expectations for providers, with the FCA overseeing DPC enactment crossed the market. As such, retailers request to guarantee that immoderate aboriginal third-party providers person obtained the indispensable FCA authorisation and comply with the caller rules, arsenic volition beryllium required erstwhile the caller regulations travel into place. In addition, an FCA-authorised steadfast indispensable o.k. DPC fiscal promotions.