UK to Bring Buy Now, Pay Later Firms Under FCA Supervision from July 2026

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The United Kingdom will begin regulating the buy now, pay later (BNPL) sector from 15 July 2026, placing the industry under the oversight of the Financial Conduct Authority (FCA) following a period of consultation with market participants.

Under the new framework, BNPL providers—formally referred to as Deferred Payment Credit (DPC) firms—will be required to enter a temporary permission regime (TPR) while the regulator assesses their applications for full authorisation.

Sarah Pritchard, Deputy Chief Executive of the FCA, said the regulator aims to balance industry growth with consumer safeguards. "We want the Buy Now Pay Later sector to thrive," she said, noting that the products provide "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," she added.

BNPL services enable consumers to purchase goods and services immediately and spread payments over time, often interest-free if instalments are paid as scheduled. The model has gained popularity in e-commerce due to its flexibility.

According to the FCA, the regulatory changes are intended to "reduce the risks of harm to consumers."

To qualify for the temporary permission regime, firms must have been conducting BNPL activities as of 15 July 2025, when the FCA launched its consultation paper. Eligible companies are required to confirm their intention to register after 15 May and no later than two weeks before the rules take effect.

Firms choosing not to enter the TPR have been asked to cease any BNPL activities that fall within the scope of the new regulations.

The FCA clarified that companies without authorisation or temporary permission may continue servicing DPC agreements entered into before the regulation date, as those agreements will remain exempt.

The move aligns the UK with other jurisdictions that have introduced oversight for the sector. Australia's financial regulator has previously required BNPL providers to obtain a credit licence.