New regulations set to take effect next year will require buy now, pay later (BNPL) providers to conduct affordability checks on shoppers, the Financial Conduct Authority (FCA) has announced. The move aims to protect consumers from taking on unmanageable debt.
Under the proposals, BNPL firms must verify that customers can afford repayments and offer support for those in financial difficulty. Borrowers will also gain the right to complain to the Financial Ombudsman Service. The rules will apply once BNPL products come under FCA regulation in 2026.
The FCA consultation, open for feedback until September 26, 2025, would see the regime enforced from July 15, 2026. Firms will have six months after that to apply for full authorisation. FCA research shows one in five UK adults (10.9 million) used BNPL in the 12 months to May 2024, up from 17% in 2022.
Sarah Pritchard, FCA deputy chief executive, said the regulation would provide protections while allowing innovation. Klarna and Clearpay both welcomed the consultation, with Clearpay noting that 71% of UK adults believe BNPL should be subject to financial legislation.
