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Buy now pay later (BNPL) customers would benefit from similar protections to other types of lending under new proposals from the Financial Conduct Authority (FCA).
The draft rules would require lenders to assess affordability and offer support if borrowers fall into financial difficulty. BNPL users would also be able to take complaints to the Financial Ombudsman Service.
The protections are due to take effect in 2026 when BNPL products come under the FCA’s remit.
FCA research published in May found that one in five UK adults – 10.9 million people – had used BNPL at least once in the previous 12 months, up from 17% (8.8 million) in 2022.
While BNPL can offer “convenient access to affordable credit”, the FCA said the products also carry risks and potential for harm, similar to other forms of borrowing.
A temporary permissions regime will allow firms to continue trading in line with FCA rules while awaiting full authorisation. The regulator is seeking views from lenders, consumer groups and industry stakeholders to help shape the final rules.
The consultation runs until 26 September 2025.
Sarah Pritchard, deputy chief executive at the FCA, said: “We have long called for BNPL products to be brought into our remit, so people can benefit from BNPL while being protected.
“Our regulation will help consumers navigate their financial lives, with checks on whether they can afford to repay, support when things go wrong and access to the right information to make informed decisions. We’re mainly relying on existing requirements, including the Consumer Duty, rather than proposing to make lots of new rules, supporting growth and allowing firms to innovate.”
