12th July 2026
The biggest change is that Buy Now, Pay Later (BNPL) comes under full FCA regulation from 15 July 2026. Until now, many of the most popular "pay in 3" and short-term interest-free products have operated outside the normal consumer credit rules.
The changes affect providers such as Klarna, Clearpay, PayPal Pay in 3, Zilch and other third-party BNPL lenders.
The main changes are:
Affordability checks – lenders must assess whether you can realistically afford the repayments before approving the credit.
Clearer information – borrowers must be told upfront how much they are borrowing, when repayments are due, what late fees apply and what rights they have.
Support for customers in difficulty – firms must provide appropriate help if someone struggles to repay.
Complaints rights – customers will be able to take unresolved complaints to the Financial Ombudsman Service, something that was generally not available before for these products.
Section 75 protection – in qualifying cases, consumers will gain similar protections to those available on credit card purchases if goods are faulty or not supplied.
What won't change?
Not every "buy now, pay later" arrangement is covered.
If a retailer provides the credit itself, rather than through an independent finance company, that "merchant own credit" remains outside these new FCA rules under the legislation passed by Parliament.
Why are the rules changing?
The BNPL market has grown extraordinarily quickly. The FCA estimates that around 10.9 million UK adults used BNPL in the year to May 2024, with lending exceeding £13 billion. Regulators became concerned that some people were taking out multiple BNPL agreements without adequate affordability checks.