Journey
Meet FCA rules for Buy Now Pay Later
What Buy Now Pay Later providers and merchants must do now that BNPL has been FCA-regulated since 15 July 2026. Covers what changed, whether you need FCA authorisation, affordability assessment setup, advertising compliance, pre-contract disclosure, and complaints handling through the Financial Ombudsman Service.
Buy Now Pay Later regulation: what applies to you
Since 15 July 2026, Buy Now Pay Later (BNPL) and other forms of Deferred Payment Credit have been FCA-regulated consumer credit activities. BNPL providers need FCA authorisation. Merchants that offer BNPL at checkout do not need FCA permission, because brokering DPC agreements is excluded from credit broking. The FCA published its final rules in PS26/1 on 11 February 2026.
This learning path covers what both providers and merchants need to do.
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Understand what is changing
Before 15 July 2026, most BNPL products were 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 is regulated. Agreements made from 15 July 2026 are regulated credit agreements, providers must be FCA-authorised, consumers have new rights, and the Financial Ombudsman Service has 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 and the temporary permissions regime.
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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 do not need FCA permission: brokering a DPC agreement is excluded from credit broking. Merchants that provide their own DPC directly also stay outside regulation.
The exclusion covers only DPC. If you also offer credit that charges interest or fees, or runs longer than 12 months, brokering it may still need credit broking permission.
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.
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Prepare affordability assessment processes
Since 15 July 2026, the FCA expects creditworthiness assessments proportionate to the credit offered. Basic fraud and identity checks do not suffice for regulated agreements.
Proportionality applies: a £50 purchase split into three payments will not require the same depth as a £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.
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Set up advertising and pre-contract compliance
Since 15 July 2026, BNPL promotions have been financial promotions subject to FCA rules, including checkout messaging, marketing emails, social media, and in-store signage. Consumers must also receive clear pre-contract information 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 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.
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Prepare for complaints and verify your readiness
A major consumer protection gain from BNPL regulation is that consumers can 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 quick-check
Quick compliance check for experienced consumer credit firms.
You have completed this learning path
You now understand what BNPL regulation means for your business and the steps you need to take. Your priorities are:
- Determine whether you need FCA authorisation (providers do; merchants that only offer BNPL at checkout do not)
- Make sure you hold FCA authorisation or a temporary permission before you make new DPC agreements
- 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
Providers cannot make new DPC agreements without FCA authorisation or a temporary permission.