Buy now, pay later (BNPL) regulation in the UK has been a long time coming. The government confirmed in 2023 that BNPL would be brought under the Financial Conduct Authority's oversight, following the Financial Services and Markets Act 2023. The FCA ran a consultation on the detailed rules in 2024.
The regulation is designed to close a gap. For years, BNPL products sat outside the Consumer Credit Act protections that apply to credit cards and personal loans. That is now changing.
But not everything changes. This note is about the parts that stay the same.
What is changing?
The confirmed direction of travel includes:
- BNPL lenders will be required to carry out affordability checks before offering credit.
- Borrowers will gain clearer information about repayment terms before they commit.
- Formal complaints routes will open up, including access to the Financial Ombudsman Service (FOS).
- Lenders will need FCA authorisation to offer BNPL products.
The FCA published its consultation paper (CP24/2) in February 2024, setting out proposed rules for firms.
What does not change?
Regulation does not make BNPL automatically safe or automatically right for every purchase. A few things stay the same regardless of when the rules come into force.
You can still overspend. Affordability checks are a floor, not a ceiling. They may stop some borrowing that lenders judge unaffordable. They will not prevent every risky borrowing decision. The borrower's own budget remains the first line of protection.
Missed payments still carry consequences. Some BNPL providers already report to credit reference agencies. Others do not, but this may change as regulation beds in. Either way, missed payments on BNPL can lead to late fees, debt collection activity, and potential damage to a credit file. That risk exists now and will continue to exist after regulation.
The debt is real. BNPL is credit. Spreading the cost of a purchase means owing money to a lender. Regulation does not change that fundamental structure.
Comparison is still the borrower's job. FCA rules will require clearer disclosures, but they will not rank products for consumers or tell borrowers which provider to use. Comparing repayment terms, late-payment charges and what happens if circumstances change remains something worth doing before committing.
Why it matters
The regulation gap was a genuine consumer protection problem. The new rules should make BNPL fairer and give borrowers more formal recourse. That is a meaningful improvement.
The risk is that the arrival of regulation makes BNPL feel more trustworthy than it has always been, which may encourage more spending on credit than some borrowers can comfortably manage. Treating regulated BNPL the same way you would treat any other credit line is a reasonable starting point.
Who may be affected
- People who use BNPL regularly for shopping, including fashion, electronics and household goods.
- Anyone who has missed a BNPL payment or is close to doing so.
- Borrowers who also carry credit card debt or personal loans, where adding BNPL repayments changes the overall picture.
What to read next
For a fuller explanation of how BNPL works and what to watch for, see the guide:
Sources
- FCA: Consumer Credit regulation of BNPL, FCA CP24/2 consultation paper on BNPL regulation, published February 2024.
- UK Government: Financial Services and Markets Act 2023, primary legislation enabling HM Treasury to bring BNPL into the regulated perimeter.