SIG-A — Daily FinTech Signal
BNPL crosses the FCA perimeter on 15 July. The scope is set and the transition window has closed.
On 15 July 2026, the Financial Conduct Authority begins regulating Deferred Payment Credit — the interest-free instalment model most people know as Buy Now, Pay Later. The change brings a market that grew from £0.06 billion in 2017 to more than £13 billion in 2024, used by roughly one in five UK adults, inside the consumer-credit perimeter for the first time.
The structural distinction sits in who provides the credit. Where a third-party lender stands between the customer and the merchant — the lender and the supplier being different entities — the agreement becomes regulated. Where a retailer offers its own instalment terms directly, it does not. Agreements written before 15 July remain unregulated; only those entered on or after Regulation Day fall under the new rules.
For lenders, the obligations are familiar consumer-credit territory: proportionate affordability checks, clear pre-contract information, support for customers in difficulty, access to the Financial Ombudsman Service, and the full weight of the Consumer Duty. Firms without existing permissions had one route to keep writing new business through the transition — the Temporary Permissions Regime — and that window ran from 15 May to 1 July. It is now shut. Any qualifying lender that needed it and did not register cannot originate new regulated agreements from Regulation Day.
The less-discussed exposure sits at the checkout. A merchant offering third-party BNPL is not the regulated lender, but it presents the credit. Under the Consumer Duty, that presentation now carries expectations: promotions that set benefits against costs, a customer who understands they are taking credit rather than selecting a payment method, and staff who are not steering the sale. The regulatory obligation lands on the lender. The commercial and reputational consequence of how it is presented lands on the merchant.
The date is fixed. The scope is settled. What remains variable is operational readiness — and for the firms that needed the transition regime, even that is now decided.
