UK announces new rules for BNPL, two providers support changes
Stricter rules have been announced to protect shoppers using buy-now-pay-later (BNPL) credit services, with the UK government saying it wants to end the 'wild west' of unregulated borrowing.
Under the legislation, lenders will have to carry out 'affordability checks' to stop people taking on too much debt and shoppers will also have faster access to refunds. Two major suppliers, Klarna and Clearpay, said they support the changes.
Some 11 million people in the UK are estimated to have used BNPL in the last year. But campaigners say the system encourages shoppers to spend more than they can afford. Consumer groups welcomed the move claiming many users didn't realise they were taking on debt they might struggle to repay.
Organisation Citizens Advice noted that BNPL products are currently unregulated and the new measures were a 'crucial step' towards better protection for shoppers, the report said.
Its director of policy, Tom MacInnes, told the BBC: 'For too long, people have been exposed to unaffordable debt from a BNPL sector that has operated in a regulatory grey area," said T at Citizens Advice.
'For some, this has had dire consequences. Many people are struggling to repay credit they can't afford, falling behind on essential bills and often needing emergency support, like food bank vouchers."
Emma Reynolds, economic secretary to the Treasury, also said BNPL had 'transformed shopping for millions', but had left consumers exposed and operated as a 'wild west'.
'These new rules will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow, and create jobs.'
Under BNPL, rather than paying the full amount of a purchase in one go, shoppers can spread payments into smaller amounts over a period of time, with payment in three or four monthly chunks being widely used by BNPL providers.
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19-05-2025
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UK announces new rules for BNPL, two providers support changes
Stricter rules have been announced to protect shoppers using buy-now-pay-later (BNPL) credit services, with the UK government saying it wants to end the 'wild west' of unregulated borrowing. Under the legislation, lenders will have to carry out 'affordability checks' to stop people taking on too much debt and shoppers will also have faster access to refunds. Two major suppliers, Klarna and Clearpay, said they support the changes. Some 11 million people in the UK are estimated to have used BNPL in the last year. But campaigners say the system encourages shoppers to spend more than they can afford. Consumer groups welcomed the move claiming many users didn't realise they were taking on debt they might struggle to repay. Organisation Citizens Advice noted that BNPL products are currently unregulated and the new measures were a 'crucial step' towards better protection for shoppers, the report said. Its director of policy, Tom MacInnes, told the BBC: 'For too long, people have been exposed to unaffordable debt from a BNPL sector that has operated in a regulatory grey area," said T at Citizens Advice. 'For some, this has had dire consequences. Many people are struggling to repay credit they can't afford, falling behind on essential bills and often needing emergency support, like food bank vouchers." Emma Reynolds, economic secretary to the Treasury, also said BNPL had 'transformed shopping for millions', but had left consumers exposed and operated as a 'wild west'. 'These new rules will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow, and create jobs.' Under BNPL, rather than paying the full amount of a purchase in one go, shoppers can spread payments into smaller amounts over a period of time, with payment in three or four monthly chunks being widely used by BNPL providers.
Fashion Network
19-05-2025
- Fashion Network
UK announces new rules for BNPL, two providers support changes
Organisation Citizens Advice noted that BNPL products are currently unregulated and the new measures were a 'crucial step' towards better protection for shoppers, the report said. Its director of policy, Tom MacInnes, told the BBC: 'For too long, people have been exposed to unaffordable debt from a BNPL sector that has operated in a regulatory grey area," said T at Citizens Advice. 'For some, this has had dire consequences. Many people are struggling to repay credit they can't afford, falling behind on essential bills and often needing emergency support, like food bank vouchers." Emma Reynolds, economic secretary to the Treasury, also said BNPL had 'transformed shopping for millions', but had left consumers exposed and operated as a 'wild west'. 'These new rules will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow, and create jobs.' Under BNPL, rather than paying the full amount of a purchase in one go, shoppers can spread payments into smaller amounts over a period of time, with payment in three or four monthly chunks being widely used by BNPL providers.
