From 15 July 2026, Buy Now Pay Later (BNPL) products, formally defined in legislation as Deferred Payment Credit, will fall within the regulatory perimeter of the Financial Conduct Authority (FCA). 

This marks a considerable shift for a market that has grown rapidly in recent years, becoming a mainstream payment option for millions of consumers across the UK. Until now, much of the BNPL sector has operated outside full FCA regulation. These upcoming reforms are designed to introduce clearer standards, strengthen consumer protections and encourage sustainable long-term growth. 

What the New Regime Will Require 

Under the new framework, BNPL lenders will need to obtain FCA authorisation and comply with the same core regulatory expectations that apply across consumer credit markets. 

Key requirements include: 

• Adherence to the Consumer Duty, ensuring firms deliver good outcomes for customers 

• Proportionate affordability assessments prior to lending 

• Appropriate support for customers experiencing financial difficulty 

• Clear, compliant customer documentation and disclosures 

• Access to the Financial Ombudsman Service (FOS) for complaints and redress 

These changes balance innovation and consumer convenience with greater accountability and oversight. The FCA has stated that regulation should not stifle growth, but instead encourage responsible market participation and improve trust. 

A Maturing Market 

BNPL is now used by approximately 11 million UK adults each year. Its speed, accessibility and integration into online checkout journeys have driven widespread adoption. 

However, this growth has also raised concerns about affordability, transparency and consumer understanding of repayment obligations. Bringing BNPL into the regulatory perimeter reflects the market’s evolution from niche payment option to a significant component of the UK consumer credit landscape. 

For firms operating in, or considering entry into the sector, this shift represents both an operational challenge and strategic opportunity. 

The Role of Product Partnerships 

As an S21 authorised firm, Product Partnerships is well positioned to support businesses preparing for the regulatory transition. 

Our support includes: 

• Advising on FCA authorisation strategy and regulatory positioning 

• Embedding Consumer Duty-aligned governance frameworks 

• Developing compliant customer documentation and affordability processes 

• Strengthening oversight, monitoring and reporting arrangements 

• Supporting ongoing supervisory engagement and regulatory readiness 

The move will require careful planning across governance, systems, documentation and customer journey design. Early, structured preparation will be critical to ensuring compliant and sustainable market participation.