Is buy now pay later regulated by the FCA?

Buy now pay later is regulated by the Financial Conduct Authority (FCA) from 15 July 2026. From that date, most buy now pay later agreements became regulated credit agreements, bringing them under rules similar to those that cover credit cards¹. The FCA started regulating deferred payment credit, the formal name for buy now pay later, on 15 July 2026².

The change matters because it applies only to agreements taken out from that date. If you made a buy now pay later purchase before 15 July 2026, the new rules do not apply to it, and you cannot take a complaint about it to the Financial Ombudsman Service³. For anything bought on or after that date, you get affordability checks, clear information about payment dates, access to the ombudsman, and Section 75 protection on eligible purchases⁵.

Buy now pay later launched in the UK in 2014 and grew quickly into a major part of how people pay for goods online and in shops⁷. Until July 2026 an exemption in law meant these payment plans were not treated in the same way as traditional credit agreements⁸. That exemption has now been removed for most agreements.

Buy now pay later is now regulated by the FCA

The FCA began regulating deferred payment credit, often known as buy now pay later, on 15 July 2026². From that date, most BNPL agreements are regulated by the FCA³. The rules came into force in July 2026, after Parliament approved plans to regulate unregulated buy-now-pay-later credit in July 2025¹⁰.

Before regulation, an exemption in law meant these payment plans were not treated in the same way as traditional credit agreements⁸. The FCA consulted on its proposed approach to deferred payment credit lending in 2025¹¹, and the government consulted on draft legislation in October 2024¹². Respondents to that consultation expressed a strong desire for action and were generally supportive of the proposed regulatory regime¹².

The legal mechanism is a change to the Regulated Activities Order. Certain buy now pay later agreements that were previously exempt under article 60F(2) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 became regulated credit agreements within the meaning of article 60B(3)¹³. The result is to classify BNPL agreements as regulated credit agreements¹⁵.

One early change the FCA made was to ban interest charges on credit that customers had already paid off during interest-free loan periods¹⁶. This stops a provider charging interest on a balance that has already been cleared within the promotional period.

Agreements taken out before and after regulation began

The date your agreement was taken out decides which set of rules applies. The new rules apply to purchases made using buy now pay later on or after 15 July 2026 only³. If you made a purchase using buy now pay later before 15 July 2026, these rules do not apply to you³.

That means older agreements keep the terms they were sold under. They are not brought into the new regime retrospectively, and the protections that come with regulation, including access to the Financial Ombudsman Service, do not extend to them⁴.

This split is common when a product moves into regulation. The same approach was used for sale and rent back agreements, where activities relating to agreements established before 1 July 2009 were only regulated when carried on on or after that date and in certain circumstances¹⁸. For hire purchase, some agreements are not regulated by the Consumer Credit Act at all, and borrowers do not have a right to end those agreements early¹⁹.

If you are unsure when an agreement started, the paperwork or the provider's app will show the purchase date. The date that matters is when the agreement was entered into, not when the first payment was due.

What FCA regulation means for BNPL borrowers

Regulation changes what a provider must do before, during and after a buy now pay later agreement. The FCA consulted on regulation of deferred payment credit, known as buy now pay later, in 2025²⁰, and the rules that followed set out new duties for lenders.

Before you borrow, BNPL providers will run an affordability check for all purchases⁵. Providers will carry out affordability checks to make sure you can afford the item you purchase⁶. A lender will also carry out a credit check to make sure you can afford the repayments⁴.

During the agreement, all BNPL providers must provide you with clear information about your agreement, the payment amount and due date, and must explain what happens if you miss a payment⁵. BNPL firms will provide exact payment dates and make clear what happens if payments are missed. They must also offer repayment options and signposting to free debt advice services¹⁷.

If a payment goes wrong, the provider must contact you promptly, explain the consequences and give you reasonable notice before taking further action. It must offer appropriate support and signpost free debt advice if you show signs of financial difficulty²¹. You may be charged a penalty fee if your payments are late or if you miss a payment, and your provider may pass information about the missed payment to credit reference agencies, which will affect your credit score⁵.

The rules also bring buy now pay later closer to credit cards. Buy Now, Pay Later now has similar protections to credit cards, which are covered under the Consumer Credit Act⁴.

Checking a BNPL provider is authorised

Since 15 July 2026, all BNPL providers must be authorised and regulated by the Financial Conduct Authority⁵. Once BNPL products entered regulation, lenders offering them needed to be authorised by the FCA¹⁵. Lenders offering the product need to be approved by the FCA²².

There is one extra requirement for merchants. Under the preferred regulatory option, merchants who operate as domestic premises suppliers, meaning they broker BNPL agreements in person in a consumer's home, need to obtain credit broking permissions from the FCA¹⁵.

Buy now pay later is offered through many providers, including Klarna, Clearpay, PayPal and Amazon⁴. Examples of BNPL providers are Klarna, Clearpay and Laybuy, although there are many providers available⁵. You can check whether a provider is authorised on the FCA Register, which lists firms and the permissions they hold.

Where to get help if a BNPL payment goes wrong

If something goes wrong with a buy now pay later purchase, there are several routes depending on what the problem is and when the agreement was taken out.

For faulty goods, non-delivery or a retailer that has stopped trading, Section 75 of the Consumer Credit Act 1974 may apply. When buying a single item costing between £100 and £30,000 on or after 15 July 2026 using a BNPL provider, you are protected under Section 75⁵. This means your buy now pay later provider and the retailer are both jointly responsible if anything goes wrong⁴. You can read more about how this works on our page on Section 75 on loans, car finance and point-of-sale credit.

If you feel you have been treated unfairly by a BNPL provider and are not getting anywhere, you can complain to the independent Financial Ombudsman Service¹⁷. The ombudsman can look at your complaint if you took out the agreement on or after 15 July 2026⁴. Complaints can only be taken to the Financial Ombudsman for BNPL items purchased on or after 15 July 2026⁴. You can escalate complaints to the Financial Ombudsman Service if you need to⁶.

For payment problems that are not about the credit agreement itself, the Payment Systems Regulator advises contacting your financial provider, such as your bank, by phone, and says you can also contact the Financial Ombudsman Service if you are still unhappy²³.

Free and impartial help is available if you are struggling with buy now pay later repayments. Providers must signpost free debt advice services when a borrower shows signs of financial difficulty¹⁷. You can also read our guide to what to do if you can't repay a loan and our page on complaining about a lender or finance company.