BNPL regulation changes: what you need to know

The FCA's regulation of Buy Now Pay Later comes into force on 15 July 2026. If you're marketing BNPL products or working with retailers that offer them, here's what you need to know.

The timeline

15 July 2026 - Regulation Day. BNPL providers must be FCA authorised to continue operating.

15 May - 1 July 2026 - Registration window for the Temporary Permissions Regime (TPR), allowing existing providers to keep trading while seeking full authorisation.

15 January 2027 - Deadline for TPR firms to apply for full authorisation.

The change

From July 2026, unauthorised merchants promoting third-party BNPL at checkout must have their financial promotions approved by an authorised firm - usually their BNPL partner.

The complication: firms operating under the TPR can only approve their own promotions, not their merchants'. Between July and January 2027, merchants partnered with TPR firms may struggle to legally promote BNPL.

The practical solution: BNPL providers are expected to create pre-approved marketing materials for merchant partners rather than approving individual promotions.

Consumer Duty implications

BNPL falls under the Consumer Duty framework. This affects how products can be marketed:

• Clear target markets must be defined
• Fair value must be demonstrated beyond pricing
• Vulnerable customers need tailored support
• How and where products are promoted matters, not just what you say

Disclosure requirements

The FCA is creating a bespoke regime for BNPL that replaces the old Consumer Credit Act requirements:

• Pre-contract information at checkout must be clear and balanced
• Digital tools like email and SMS reminders are encouraged
• No backdated interest on amounts repaid within promotional periods
• Information must support informed decision-making

Affordability and messaging

Mandatory affordability checks on every transaction change how BNPL can be positioned. Marketing can't encourage use if someone can't afford it. Expect more friction in the customer journey as checks happen at the point of sale.

What to do now

BNPL providers should:

• Audit marketing materials for Consumer Duty compliance
• Develop pre-approved promotional kits for merchants
• Build systems to approve merchant promotions at scale
• Review affordability messaging across channels
• Prepare for increased complaints (Financial Ombudsman access is new)

Retailers should:

• Check which BNPL partners will have full authorisation vs TPR status
• Establish approval processes with authorised partners
• Review checkout messaging and disclosures
• Consider how affordability checks might affect conversion

Agencies and marketers should:

• Understand the financial promotions approval workflow
• Help clients maintain commercial effectiveness within regulatory constraints
• Watch the July-January gap for TPR firms

What to know more? Read more on the FCA website

One more thing

The government is monitoring merchant-provided credit (where retailers offer instalments directly without a third-party BNPL provider). This currently sits outside regulation. If it gets abused to avoid the rules, expect that loophole to close.