The Australian Securities & Investments Commission (ASIC) has mandated that Buy Now, Pay Later (BNPL) platforms obtain credit licenses. Effective June 10, 2025, the credit license must authorize BNPL providers to engage in credit activities as credit providers, subject to transitional arrangements.
The new provision was announced today (Friday), as the National Credit Code was extended to Buy Now, Pay Later contracts following royal assent on December 10, 2024. Earlier, ASIC suggested it might issue “standalone” guidance for BNPL.
BNPL’s Growth Attracts Regulatory Attention
BNPL platforms allow consumers to purchase goods and services immediately while spreading payments over a set period, often with no interest if payments are made on time. These services are increasingly popular in e-commerce, offering flexibility and convenience.
The BNPL sector has seen rapid growth in recent years and is projected to expand at a rate of 20.7 per cent between 2021 and 2028. By 2025, global BNPL transaction volume is expected to reach $680 billion. The US market alone is predicted to contribute $100 billion of this total.
However, there are mounting concerns that BNPL providers are putting youths in massive debt.
Apply Early
All BNPL platforms operating in the country must apply for a credit license before the deadline, have ASIC accept the application for lodgement, and become members of the Australian Financial Complaints Authority (AFCA).
Companies with credit licenses that offer BNPL services must extend the scope of their authorization to include these services. If a BNPL provider's credit license does not authorize them to provide BNPL services, they must apply for a variation.
The Australian regulator also urged Buy Now, Pay Later providers to “act early to apply for or vary a credit license… [as] it may take some time to obtain additional information that needs to be included in applications, such as criminal history checks.”
As applications from operational BNPL platforms must be accepted by ASIC by June 10, 2025, firms have been asked to lodge their applications by May 11, 2025.
“Providers who do not have their application accepted for lodgement by ASIC by 10 June 2025 may be engaging in unlicensed conduct if they continue to operate,” the regulator’s announcement highlighted.
