From July 15, 2026, buy now pay later (BNPL) customers in the UK will benefit from new safety measures as the sector comes under the supervision of the Financial Conduct Authority (FCA). This regulatory change affects over 10 million people who use BNPL services, which allow shoppers to spread the cost of purchases interest-free.
Key Changes Under FCA Oversight
BNPL firms must now provide customers with clear, upfront details about their agreements, including payment due dates, amounts, and consequences of missed payments. Lenders are required to conduct proportionate affordability checks to ensure customers can repay before offering BNPL. Additionally, BNPL usage may appear on credit reports, influencing future lending decisions positively or negatively based on the borrower's financial behavior.
Firms must offer support to customers in financial difficulty and, where appropriate, direct them to free debt advice. A spokesperson for the FCA stated: "Buy now pay later can be a form of credit, but people deserve to be protected when using it. Lenders should check their customers can afford to pay it back." The spokesperson added that millions of customers will receive clearer information before signing up and better support if problems arise.
Industry Reactions: Clearpay and Klarna
Clearpay, a popular BNPL provider, welcomed the regulation, saying it "will help establish a consistent operating environment and clear standards for all providers." A spokesperson noted: "Millions of consumers rely on BNPL for short-term and interest-free credit to make everyday purchases. We will continue to provide our existing safeguards, including pausing accounts if a single payment is missed and capped late fees. Now they will also have access to important protections like Section 75, creditworthiness checks, and the Financial Ombudsman Service."
Klarna, another major provider, also endorsed the changes. A spokesperson said: "Klarna’s called for regulation since 2020, so we welcome this moment. The FCA’s rules largely formalise what we already do – we run affordability checks, show costs up front, and report to credit reference agencies." They added: "Robust regulation that gives consumers added confidence and strengthens their access to protections is a good thing."
Impact on Consumers
While BNPL can ease cost pressures by spreading payments, it may lead some to spend more than intended or accumulate multiple loans, potentially turning to costly debt like overdrafts. Charity StepChange advises pausing to consider whether purchases would still be made if not available on credit. They recommend keeping a record of payments and loan terms to ensure they fit within budgets and do not force cuts to essentials.
For those struggling with BNPL debt, contacting the lender is the first step. Additional support is available from organisations such as StepChange, Citizens Advice, Christians Against Poverty, and National Debtline, run by the Money Advice Trust.
