BNPL Credit Is Now Regulated: What Changes From 15 July 2026

From 15 July 2026, Buy Now Pay Later (BNPL) borrowing in the UK comes under full FCA regulation for the first time. Until now, products like Klarna and Clearpay sat outside the Consumer Credit Act, meaning users had none of the standard protections that apply to credit cards or loans.

Why it matters

BNPL has grown from a niche checkout option into a mainstream borrowing method. The market expanded from £0.06bn in 2017 to over £13bn in 2024, and the FCA's 2024 Financial Lives Survey found 20% of UK adults — 10.9 million people — had used it in the previous 12 months. Much of that growth happened with no affordability checks and no right to complain to an ombudsman if something went wrong.

What's changing

Under the new regime, lenders must:

• Give clear, upfront information on payment dates, amounts, and the consequences of missing a payment
• Run proportionate affordability checks before approving a purchase
• Offer support — including signposting to free debt advice — for customers in financial difficulty
• Allow customers to escalate unresolved complaints to the Financial Ombudsman Service

Firms had to register for a temporary permissions regime between 15 May and 1 July 2026, and now have six months from the regulation's start date to secure full FCA authorisation. Any BNPL provider trading without either will be operating illegally.

The international picture

The UK is following, not leading. In the EU, the revised Consumer Credit Directive (CCD II) is being transposed into national law through 2026, closing the exemption that let short-term interest-free BNPL avoid consumer credit rules. Australia has gone further, treating BNPL providers exactly like any other credit provider, removing the regulatory gap entirely. The US remains the outlier: the Consumer Financial Protection Bureau classified BNPL firms as card providers in 2024 but withdrew that interpretive rule in 2025, leaving federal oversight patchier than in the UK, EU or Australia.

What it means for you

If you use BNPL, expect more checks at checkout — and possibly fewer approvals if a purchase looks unaffordable. Missed payments may also start showing up in your credit file, since BNPL repayment data is increasingly feeding into UK credit scoring models. That cuts both ways: responsible use could eventually help your credit history, but missed payments will hurt it in a way they mostly haven't until now.

If you're already struggling with BNPL debt, you no longer have to wait for the rules to bite — MoneySavingExpert and Which? both have guidance on managing existing BNPL balances, and StepChange offers free debt advice.

Checklist: getting ready for the change

• Check which BNPL providers you currently use and whether they've confirmed FCA authorisation status
• Review any outstanding BNPL balances before 15 July, since terms on existing agreements could be updated
• Read the payment schedule on any new BNPL agreement in full — it will now be clearer, but still read it
• If you've missed BNPL payments before, ask the provider about its financial difficulty support options
• Know that you can now complain to the Financial Ombudsman Service if a BNPL dispute isn't resolved

Key Numbers

• 15 July 2026 — date the new FCA regime takes effect
• £13bn+ — size of the UK BNPL market in 2024, up from £0.06bn in 2017
• 20% — share of UK adults who used BNPL in the year to May 2024
• 6 months — time firms have to gain full authorisation after the regime starts

Sources

• FCA: New protections confirmed for Buy Now Pay Later borrowers
• FCA: Regulating Buy Now Pay Later
• Checkout.com: BNPL regulations across major global markets
• Norton Rose Fulbright: BNPL — how are governments in the UK, US and Australia responding?

Educational content only — not financial advice.