New regulations from the Financial Conduct Authority (FCA) will take effect on July 15, 2026, affecting buy now, pay later (BNPL) services used by millions of shoppers at major retailers including ASOS, boohoo, H&M, Nike, Gymshark, Selfridges, Charlotte Tilbury, Apple, Dyson, Currys, IKEA, Very, Booking.com, Trainline, and Cult Beauty. The rules mandate clearer information and proportionate affordability checks before consumers can use BNPL at checkout.
What the New Rules Mean for Consumers
Speaking on BBC Morning Live, personal finance expert Laura Pomfret explained that BNPL providers—such as Klarna, Clearpay, PayPal, and Zilch—will now be authorised by the FCA and subject to the Consumer Duty. Consumers must receive upfront details about payment due dates, amounts owed, and consequences of missed payments. Lenders must conduct affordability checks to ensure borrowers can repay.
Pomfret highlighted the rapid growth of BNPL: "£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 in 2024, one in five UK consumers—10.9 million adults—used BNPL in the 12 months prior. She noted that many users do not realise they are borrowing: "You don't actually realise you're borrowing to pay for that item."
Addressing Loan Stacking and Debt Concerns
Pomfret warned about "loan stacking," where consumers use multiple BNPL providers across different websites, unknowingly accumulating debt. Previously, affordability assessments were not standard, allowing some to overextend themselves. Under the new rules, lenders must check affordability before offering BNPL.
Customers have also complained about unclear repayment terms and deadlines. The FCA now requires BNPL providers to offer support for those in financial difficulty and signpost free debt advice. Consumers can complain to the Financial Ombudsman Service (FOS) if issues arise.
Potential Impact on Shoppers
Pomfret cautioned that frequent users might face refusals or extra steps at checkout: "For someone that uses it a lot, you may suddenly find you maybe refused it." However, occasional users making one-off purchases may see little change: "If you can afford it, it's perfectly fine to use."
Industry and Advocate Reactions
Sarah Pritchard, deputy chief executive at the FCA, said: "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."
Rocio Concha, Director of Policy and Advocacy at Which?, commented: "Because it has so far been unregulated, consumers paying this way haven't been made sufficiently aware of the risks... Proper affordability checks and access to redress should give shoppers proper protections."
A Clearpay spokesperson said: "We welcome regulation, which will establish a consistent operating environment." A Klarna spokesperson added: "These new rules will raise standards across the market." UK Finance also supported the move: "It's right that the product is regulated."
