Buy now, pay later (BNPL) is a form of credit that gives you more time to pay for a product or service, meaning you can spread the cost of your shopping, which can help with cashflow. But it does come with risks (see our earlier article) particularly as the BNPL sector isn’t currently regulated. However, from July 2026 new regulation will come into force to help protect people who use this service. Among the changes to expect, BNPL providers will need to:
- Run affordability checks, both at the start and throughout the contract. This should prevent people from taking on too much debt and being caught out by late payment fees.
- Give clear information regarding cancellation rights, charges and any impact on credit ratings if a payment is missed.
- Give Section 75 protection on goods costing more than £100 but less than £30,000. As is currently the case with credit cards, this would make the BNPL provider jointly liable with the retailer if anything goes wrong.
- Immediately contact the customer if a repayment is missed, in order to ensure the customer understands the consequences of missing a repayment, and to offer support if they get into financial difficulty.
- Allow a customer to complain to the Financial Ombudsman Service if a complaint to the BNPL isn’t upheld.
GMMAP are delighted that these protections will be coming into force. In the meantime, if you need advice or help with any problem debt, contact GMMAP today. Getting in touch is easy. You can find your local office here.