The United Kingdom’s Financial Conduct Authority (FCA) will regulate the buy now, pay later (BNPL) industry from 15 July 2026. The regulation follows months of consultation, during which the regulator took input from industry players.
Companies Have to “Thrive”, but Customers Must Be Protected
“We want the Buy Now Pay Later sector to thrive,” said Sarah Pritchard, Deputy Chief Executive at the FCA. “It provides an important source of credit to many.
“But crucially, no one should be lent to if they are unable to repay, because that could worsen their financial situation. Now Parliament has given us the powers, we are putting in place proportionate protections for the 11 million people who use it.”
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.
According to the FCA, its goal with the regulations is to “reduce the risks of harm to consumers”.
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A Temporary Regime to Be Followed by Full Licensing
Under the incoming regulations, BNPL companies, technically known as Deferred Payment Credit (DPC) firms, will need to apply for the temporary permission regime (TPR) while the regulator evaluates their applications.
However, these firms must have been carrying out BNPL activities on 15 July 2025, when the regulator began its regulatory process by launching the consultation paper. These firms need to confirm their intention to register after 15 May but no later than two weeks before the regulation day.
For companies that are not willing to enter the TPR, the regulator has asked them to stop any BNPL activities that would fall under the regulations.
“Firms that are not authorised or do not have a temporary permission will continue to be able to service DPC agreements that were taken out before regulation day,” the regulator noted. “Those agreements will remain exempt.”
Earlier, the FCA’s counterpart in Australia also required a credit licence for such BNPL companies.
