New BNPL regulations will build confidence, strengthen trust and support business growth
Marcus Gregory of Payment Assist, discusses eagerly anticipated new rules governing Buy Now, Pay Later (BNPL) finance and explains why their introduction should be seen an important step forward for both consumers and retailers alike.
New rules were recently introduced guiding the future of BNPL finance. The move, which sees deferred payment credit officially brought into full FCA regulation, will provide consumers with better support, while necessitating deeper and more comprehensive affordability checks from lenders.
Initially proposed back in 2025, the rules require lenders to provide customers with clear information before taking out a BNPL product. This includes detailing their agreement upfront by specifying repayment amounts, repayment dates and what happens if they were to fall behind.
Elsewhere, more robust affordability checks will ensure that consumers can actually repay what they intend to borrow, while lenders are expected to provide necessary support when customers fall into financial difficulty. Finally, should there be unresolvable issues, consumers will be able to take their case to the Financial Ombudsman Service (FOS).
Although the new rules have been positioned primarily as a consumer benefit, retailers should see the changes as far more than just regulatory change. Indeed, if handled correctly, they provide the perfect opportunity to position flexible finance as a vital consumer benefit in a way that inspires confidence, builds trust and – ultimately – supports long-term business growth.
Breaking down the consumer benefits
With the cost of living putting ever-increasing pressure on household budgets, the ability to spread out payments with zero interest should be seen as an invaluable consumer finance tool, particularly when it comes to unexpected expenditure.
Bringing BNPL within the scope of FCA regulation is therefore an important and positive step forward, with consumers still receiving the same benefits, but now enjoying clear disclosures, stronger customer support and better access to the FOS as well.
What’s more, thanks to stricter affordability checks, customers will no longer be approved for BNPL lending if their financial situation deems them unable to keep up with repayments. While this will ultimately reduce the total number of finance agreements approved, this will also see fewer customers put under unnecessary financial strain.
For some BNPL providers, the incoming regulations have necessitated wholesale changes. However, as part of the AIM listed Manx Financial Group, Payment Assist was already fully regulated by the FCA. This means that our business has not been subject to disruptions, allowing us to continue our focus on launching innovative new products and delivering exceptional customer service.