The UK’s Financial Conduct Authority (FCA) has proposed new consumer safeguards for buy now, pay later (BNPL) borrowers in the UK that would come into effect when BNPL comes under the FCA’s remit in 2026.
The regulator says the proposals “include requiring lenders to check that people can afford to repay BNPL loans and to offer support if they get into financial difficulty”.
FCA research indicates growing BNPL adoption in the country, with 20% of UK adults having used BNPL services at least once during the 12 months leading to May 2024, an increase from 17% in 2022.
The FCA adds that with the suggested new rules, BNPL borrowers will also be able to use the Financial Ombudsman Service for dispute resolution.
The regulator has initiated a consultation period on the proposals running until 26 September 2025, with the aim to gather input from BNPL providers, consumer protection groups, sector representatives, and other interested parties.
BNPL is due to come under the FCA’s remit on 15 July 2026. The regulator says a “temporary permissions regime will be open for firms to register two months before the regime comes into force”, enabling BNPL companies to maintain services while pursuing complete authorisation. Companies will then have six months from the date the regime comes into force to apply for full authorisation.
“We have long called for BNPL products to be brought into our remit, so people can benefit from BNPL while being protected. Our regulation will help consumers navigate their financial lives, with checks on whether they can afford to repay, support when things go wrong, and access to the right information to make informed decisions,” comments Sarah Pritchard, deputy chief executive of the FCA.
“We’re mainly relying on existing requirements, including the Consumer Duty, rather than proposing to make lots of new rules, supporting growth and allowing firms to innovate,” adds Pritchard.
Source: https://www.fintechfutures.com/
