Journey
Prepare your BNPL business for FCA regulation
Preparation guide for Buy Now Pay Later providers and merchants ahead of FCA regulation from 15 July 2026. Covers what is changing, whether you need FCA authorisation or credit broking permission, affordability assessment setup, advertising compliance, pre-contract disclosure, and complaints handling through the Financial Ombudsman Service.
BNPL regulation is coming: are you ready?
From 15 July 2026, Buy Now Pay Later (BNPL) and other forms of Deferred Payment Credit become FCA-regulated consumer credit activities. This affects both BNPL providers, who will need FCA authorisation, and merchants who offer BNPL at checkout, who will need credit broking permissions. The FCA published its final rules in PS26/1 on 11 February 2026, leaving firms a defined window to prepare.
This learning path covers what both providers and merchants need to do before the regulation date.
-
Understand what is changing
Until now, most BNPL products have been exempt from consumer credit regulation because they charge no interest and are repaid in fewer than 12 months. The government legislated on 14 July 2025 to remove this exemption, and the FCA's final rules (PS26/1) set out how BNPL will be regulated. BNPL agreements become regulated credit agreements, providers must be FCA-authorised, consumers gain new rights, and the Financial Ombudsman Service gains jurisdiction.
Buy Now Pay Later regulation: what businesses need to know
Comprehensive overview of BNPL regulation from 15 July 2026, including the FCA's final rules, what counts as Deferred Payment Credit, the temporary permissions regime, and the timeline for full authorisation.
-
Determine whether you need authorisation
Your obligations depend on your role. BNPL providers (the entity that funds the deferred payment) need full FCA consumer credit authorisation. Merchants who offer BNPL at checkout but do not fund the credit need credit broking permission to introduce consumers to the provider.
Some merchants may qualify for limited permission if credit broking is ancillary. The distinction matters because full and limited permissions have different application requirements, fees, and ongoing obligations.
FCA consumer credit authorisation
How to apply for FCA authorisation, including full versus limited permission, application timelines, and the FCA assessment process.
Comply with credit broking rules
Credit broking compliance for merchants and retailers who introduce consumers to credit providers at checkout. Covers permission types, initial disclosure requirements, fee transparency, and exemptions.
-
Prepare affordability assessment processes
From July 2026, the FCA expects creditworthiness assessments proportionate to the credit offered. Most BNPL providers currently rely on basic fraud and identity checks; this will no longer suffice for regulated agreements.
Proportionality applies: a GBP 50 purchase split into three payments will not require the same depth as a GBP 2,000 agreement. However, all regulated agreements require some form of assessment, and you must demonstrate your process to the FCA.
Conduct affordability assessments for credit
How to design and document affordability assessments that meet FCA expectations under CONC 5, including the proportionality principle that applies to lower-value BNPL agreements.
-
Set up advertising and pre-contract compliance
From July 2026, all BNPL promotions become financial promotions subject to FCA rules, including checkout messaging, marketing emails, social media, and in-store signage. Consumers must also receive pre-contract information in the prescribed SECCI format before entering into any BNPL agreement.
Comply with credit advertising rules
Financial promotions requirements for credit products, including what counts as a promotion, representative APR rules, social media compliance, and risk warning obligations that will apply to BNPL marketing.
Meet pre-contract disclosure requirements for credit
How to provide the Standard European Consumer Credit Information (SECCI) form and adequate explanations to consumers before they enter into a BNPL agreement.
-
Prepare for complaints and verify your readiness
A major consumer protection gain from BNPL regulation is that consumers will be able to refer complaints to the Financial Ombudsman Service (FOS). This means you must have a compliant internal complaints process, respond within the eight-week deadline, and be prepared for FOS investigations and potential compensation awards. You must also meet the broader compliance framework expected of all FCA-authorised consumer credit firms.
Handle credit complaints and FOS referrals
How to handle consumer credit complaints, meet the eight-week response deadline, and prepare for Financial Ombudsman Service referrals, including common complaint categories and award limits.
Consumer credit compliance checklist
Use this checklist to verify your overall readiness for FCA regulation, covering permissions, CONC requirements, Consumer Duty, complaints handling, and regulatory reporting.
You have completed this learning path
You now understand what BNPL regulation means for your business and the steps you need to take before 15 July 2026. Your preparation priorities are:
- Determine whether you need full authorisation (providers) or credit broking permission (merchants)
- Register for the temporary permissions regime when it opens, or apply for full authorisation now
- Build proportionate affordability assessment processes
- Update all advertising and checkout messaging to meet financial promotions rules
- Implement a compliant complaints process and prepare for FOS jurisdiction
Businesses that prepare early will have the smoothest path to compliance. Those that wait risk being unable to offer BNPL after 15 July 2026.