UK BNPL Rules Force FCA Approval and Affordability Checks on £7 Billion Market
Updated
Updated · bbc.co.uk · Jul 14
UK BNPL Rules Force FCA Approval and Affordability Checks on £7 Billion Market
3 articles · Updated · bbc.co.uk · Jul 14
Summary
Wednesday’s rules require Buy Now Pay Later lenders to win Financial Conduct Authority approval, bringing the sector under formal regulation for the first time.
Shoppers now gain credit-card-like protections — including Ombudsman complaints and Section 75 refund rights on goods over £100 — but each purchase must pass an instant affordability check.
Fair4All Finance estimates 10% to 30% of users could fail conservative checks, warning some may turn to costlier or illegal lenders even though nearly half of likely rejects have not missed a BNPL payment.
The changes hit a fast-growing market: Experian estimates 8.5 million customers made more than 100 million BNPL transactions worth over £7 billion in 2025, with 98.5% repaid on time.
Debt charities welcomed the long-delayed crackdown but said some retailer in-house BNPL products remain outside the rules and warned consumers are increasingly using multiple plans for everyday essentials.