Buy Now Pay Later Comes Under FCA Regulation From 15 July — What Changes for Shoppers

From 15 July 2026, Buy Now Pay Later (BNPL) — technically known as Deferred Payment Credit (DPC) — moves inside the FCA's regulatory perimeter for the first time. Until now, the sector operated largely outside consumer credit law, despite being used by millions of UK shoppers for everyday purchases.

What's actually changing

The FCA's final rules, set out in Policy Statement PS26/1, require BNPL lenders to:

• Run a creditworthiness assessment on every transaction, including purchases under £50 — though the FCA's outcomes-based approach lets firms scale the depth of the check to the actual risk involved, per Hogan Lovells' summary.
• Give clear, upfront information on payment dates, amounts, and consequences of missing a payment, under the FCA's Consumer Duty.
• Contact customers promptly about missed payments, explain what happens next, and signpost free debt advice before pursuing enforcement action.

Firms that were already offering BNPL before 15 July 2025 could apply for the Temporary Permissions Regime to keep trading while their full FCA authorisation is processed; registration for that scheme closed two weeks before go-live.

Why it matters for shoppers

Before this rule change, BNPL agreements weren't covered by the Consumer Credit Act in the same way as credit cards or personal loans, meaning users had far fewer rights if something went wrong — no mandatory affordability checks, no standard right to complain to the Financial Ombudsman Service, and inconsistent treatment of missed payments across providers.

From 15 July, missing a BNPL payment should trigger the same kind of supportive, disclosure-heavy process you'd expect from a regulated lender, rather than an unregulated late fee or debt collection referral. It also means BNPL use may start showing up in credit reference agency data more consistently, which could affect future mortgage or loan applications — something to bear in mind if you use these products regularly.

International context

The US has taken a lighter-touch approach so far: the Consumer Financial Protection Bureau issued interpretive guidance treating BNPL like credit cards for certain disclosure purposes, but there's no dedicated licensing regime as detailed as the UK's new rules. The EU went further, folding BNPL into its revised Consumer Credit Directive, which member states have been transposing into national law through 2026. Australia introduced its own BNPL credit licensing regime via the National Consumer Credit Protection Act amendments in 2024, making it one of the earliest movers.

Key Numbers

• Regulation go-live: 15 July 2026
• Temporary Permissions Regime eligibility cut-off: trading before 15 July 2025
• Minimum transaction size requiring affordability checks: all transactions, including those under £50
• Policy Statement reference: PS26/1, published 11 February 2026

Sources

• FCA: Regulating Buy Now Pay Later
• FCA: new protections confirmed for BNPL borrowers
• Hogan Lovells: BNPL final rules for 15 July 2026 go-live
• Credit Strategy: BNPL comes under UK regulation from July 2026

Educational content only — not financial advice.