The FCA confirmed its Buy Now Pay Later rules in February, and they came into force on 15 July. Third-party BNPL products are now regulated as deferred payment credit. Lenders must carry out proportionate affordability checks, give customers clear information about what they owe and when, support people who fall into difficulty, and customers can now take complaints to the Financial Ombudsman Service.
Who carries the responsibility
Most of the new obligations sit with the lender, not the retailer. Retailers that offer their own interest-free instalments remain exempt for now under the merchant own credit exemption, and a retailer simply offering a third-party BNPL option at checkout will not usually need authorisation itself. That does not mean nothing changes for the shop.
- Affordability checks can add a step for the customer, and some applications that used to be approved instantly will not be
- Messages promoting BNPL on product and basket pages need to be accurate and balanced, not just a logo and a monthly price
- Declined or abandoned BNPL applications need a clear way back to other payment methods, without losing the basket
The retailer does not approve the loan, but the customer experiences it as part of your checkout.
Measure it before you change it
Retailers have been warned to expect more friction, particularly on lower-value baskets. Before redesigning anything, look at your own numbers since July: the share of orders using BNPL, the rate of declined applications, and what happens to a basket after a decline. If customers who are declined are leaving rather than paying another way, that is a design problem you can fix.
