Buy Now Pay later (BNPL) Borrowers will benefit from the basic protections for other types of borrowing, in accordance with proposals submitted by the UK financial behavior Authority (FCA).
Proposals include lenders’ requirement to check that people can afford to return BNPL loans and provide support if they get into financial difficulties.
They are part of FCA’s commitment to help consumers navigate their economic life. BNPL borrowers will also be able to complain about the Financial Ombudsman service if something goes wrong.
The rules will come into force when BNPL falls under FCA’s jurisdiction in 2026.
FCA’s research on non-regulated BNPL found that UK adults 1 at-5 (20%) used it at least once in 12 months to May 2024, from 17% (8.8 million) in 2022.
BNPL can provide consumers’ benefits, giving them access to affordable credit and offers a convenient way of disseminating payment for goods and services. But, as with other credit products, there are also dangers and damage.
There will be a temporary regime of rights. This means that businesses should follow the FCA rules and will be able to continue to exchange before the full authorized. The provisional rights regime will be open for businesses to register 2 months before the entry into force of the regime on July 15, 2026. Businesses will then have 6 months (from the date the regime is valid) to apply for full authorization.
FCA welcomes the views by BNPL lenders, consumer groups, the wider industry and other interested parties on its proposals to form the final rules.
The consultation It is open for feedback until September 26, 2025.