Amid deregulation, US BNPL firms look to Europe for guidance

Expect Buy Now, Pay Later (BNPL) providers to get pickier about who they approve in the coming months. As U.S. regulators push for stricter oversight, fintech lenders like Affirm and Klarna are studying European models to stay ahead of new rules. For retailers, this means the 'easy credit' era of BNPL is maturing into a more stable but cautious landscape. If fintech lenders tighten their underwriting standards to comply with new consumer protection expectations, your approval rates might dip slightly. However, this shift creates a major opening for traditional banks. Because banks are already heavily regulated and have deep pools of capital, they are launching their own BNPL products that can compete with fintechs. For your business, this is good news. You will likely have more options to offer customers, including financing from household-name banks that shoppers already trust. The key is to watch your lender mix. If you rely solely on one fintech provider, you might want to look at adding a bank-backed option to ensure your customers still have access to credit if fintechs scale back their risk appetite.

Source: American Banker — Top News

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