UK BNPL regulations come into force

New UK government regulations for Buy Now, Pay Later (BNPL) providers are now active. These rules bring BNPL products under the supervision of the Financial Conduct Authority (FCA). For retailers, this means the 'wild west' era of unregulated credit is over. Your financing partners must now perform stricter affordability checks before approving customers. They are also required to provide clearer information about loan terms and better support for shoppers who fall behind on payments. If you offer BNPL at checkout, expect some changes in how your customers interact with these tools. Approval rates might dip slightly as lenders tighten their criteria to meet the new legal standards. However, the legislation also gives shoppers more protection. Customers can now take complaints to the Financial Ombudsman Service. This could build long-term trust in BNPL, making shoppers feel more secure using it for larger purchases. Merchants should audit their point-of-sale marketing. Ensure any promotional materials for BNPL are clear, fair, and not misleading, as the FCA will be watching how these products are sold to the public.

Source: Finextra — Lending

← Return to the library· Submit a correction