New Licensees webinar - 23 June 2026

BNPL Regulation Deadline Looms

Buy Now Pay Later has exploded in popularity across the UK, allowing consumers to split purchases into interest-free instalments without traditional credit checks. Until mid-2026, most BNPL arrangements have escaped full regulation under the consumer credit regime, classified as exempt short-term credit.

That changes decisively on 15 July 2026, when the FCA brings Deferred Payment Credit agreements — the technical term for most BNPL models — into scope as regulated credit activities. Firms will need full authorisation or operate under temporary permissions while applications are processed.

The transition creates urgency for providers. Only those conducting DPC on 15 July 2025 qualify for the Temporary Permissions Regime, with notifications required by 1 July 2026 and the window opening 15 May 2026. Missing these steps means inability to enter new agreements legally after regulation day, exposing firms to criminal liability.

Consumers stand to gain stronger protections, including access to the Financial Ombudsman Service and adherence to affordability checks and complaints handling under DISP rules. Yet the regime arrives amid broader cost-of-living pressures and rising household debt, raising questions about whether tighter rules might reduce access to flexible credit for those who rely on it responsibly.

Industry tensions surface around compliance burdens. Smaller or newer BNPL entrants face steep authorisation costs and delays, potentially favouring larger incumbents and reshaping market structure. Meanwhile, the FCA balances consumer safeguards against innovation in digital finance, a trade-off evident in the measured rollout of the regime.