BNPL takes effect

The regulatory regime for Buy Now Pay Later (deferred payment credit) agreements took effect on 15 July. Both Treasury and the FCA heralded the regime, which among other things requires third party lenders to carry out affordability checks before granting credit.

Martin Lewis said that “Buy Now Pay Later done right, isn’t wrong” – the whole purpose of the reforms is to ensure that people understand what they are doing, and to make sure the loans are sold responsibly and so that people who borrow using it will get regulatory protections they did not previously have.

The FCA updated its website, which list the 15 firms that have registered under the temporary permissions regime to be able to provide BNPL credit while applying for authorisation (alongside firms who already hold appropriate permissions).