New BNPL rules could make shoppers pause before they pay

The era of near-invisible checkout credit is set to face a major reset, as previously unregulated Buy Now Pay Later (BNPL) products come under Financial Conduct Authority oversight from 15 July.

The new rules will apply to Deferred Payment Credit agreements, meaning lenders will need to carry out affordability checks, provide clearer information on repayment terms and fees, support customers in financial difficulty, and give consumers access to the Financial Ombudsman Service if something goes wrong.

Discussing the upcoming changes, Theresa Lindsay, Chief Marketing Officer at Novuna Consumer Finance, said:

"Buy Now Pay Later can be a valuable way for consumers to spread the cost of larger, planned purchases, however some unregulated products have become so seamless that borrowing can feel almost invisible for smaller everyday purchases.

“These reforms are a positive step towards ensuring credit is used responsibly. By introducing greater transparency and affordability assessments, they will help consumers better understand the commitments they’re taking on and make informed borrowing decisions. This is important for everyday spending, where the ease of accessing credit can sometimes encourage purchases that may not fit within a customer’s budget. The changes should help create a more consistent and responsible lending environment, while preserving the established benefits for retailers and customers that Buy Now Pay Later can offer for big-ticket items.”

The reforms come amid rapid growth in checkout credit. FCA figures show the BNPL market reached more than £13bn in 2024, while 10.9 million adults used BNPL in the 12 months to May 2024.

For regulated providers such as Novuna Consumer Finance, an established BNPL provider to major high street and online retailers, the reforms are a welcome step towards raising standards across the market. Novuna already operates under FCA rules, with affordability assessments central to its responsible lending approach.