From July 15, 2026, buy now pay later (BNPL) services will be regulated by the Financial Conduct Authority (FCA), bringing significant changes for the 11 million UK shoppers who use them. The new rules apply to major retailers including ASOS, boohoo, Gymshark, H&M, Nike, Selfridges, Charlotte Tilbury, Apple, Dyson, Currys, IKEA, Very, Booking.com, Trainline, and Cult Beauty.
Key Changes from July 15
Speaking on BBC Morning Live, personal finance expert Laura Pomfret explained that BNPL providers like Klarna and Clearpay must now obtain FCA authorisation and comply with the Consumer Duty. Customers will receive clearer upfront information about repayment dates, amounts, and consequences of missed payments. Lenders must also conduct proportionate affordability checks before offering BNPL.
Pomfret highlighted the sector's rapid growth: "£60 million was spent using buy now, pay later in 2017. In 2024 that was £13 billion." According to the FCA's Financial Lives Survey 2024, one in five UK consumers (10.9 million adults) used BNPL in the 12 months prior.
Protections and Consumer Impact
Under the new rules, BNPL companies must support customers in financial difficulty and direct them to free debt advice. Consumers can also complain to the Financial Ombudsman Service (FOS) if something goes wrong. Pomfret noted that some shoppers may find they are refused BNPL or face extra steps at checkout due to affordability checks.
Rocio Concha, Which? Director of Policy and Advocacy, said: "Buy now, pay later has become a popular payment method for many consumers – especially for those managing tighter budgets. However, because it has so far been unregulated, consumers paying this way haven't been made sufficiently aware of the risks." Which? has campaigned for years for BNPL regulation.
Industry Response
Sarah Pritchard, deputy chief executive at the FCA, stated: "We want the buy now, pay later sector to thrive... But crucially, no-one should be lent to if they're unable to repay because that could worsen their financial situation." A Clearpay spokesperson said: "We welcome regulation, which will establish a consistent operating environment." Klarna added: "These new rules will raise standards across the market." UK Finance commented: "It's right that the product is regulated."
