HM Treasury publishes consultation on draft BNPL legislation

HM Treasury published a consultation on draft legislation to bring Buy-Now Pay-Later (BNPL) products into regulation on 14 February 2023¹. The consultation ran from 9am on 13 February 2023 to 11:59pm on 11 April 2023, and the page is now marked "Closed consultation"¹.

The government set out its intention to regulate interest-free BNPL products on 2 February 2021¹. It consulted on policy options in October 2021 and published a consultation response in June 2022¹. The February 2023 consultation asked stakeholders whether the draft legislation effectively delivers the policy positions set out in that response¹.

Two documents were published alongside the consultation: a 45-page consultation document (PDF, 252 KB) and a nine-page draft statutory instrument (PDF, 201 KB)¹. The draft statutory instrument is the legal text that would set out the new rules, and the consultation document explains the policy behind it¹.

Why it matters for households

Interest-free BNPL lets shoppers split a purchase into instalments, usually without paying interest. The draft legislation would bring these products within FCA regulation, rather than leaving them outside it as they have been¹. The consultation itself does not change any rules: it asks for views on whether the draft text delivers the policy positions already set out in the June 2022 response¹. The government has not reported in this material when the new regime would take effect, so the start date for any change to how buy now pay later is regulated has not been reported.

What happens next

HM Treasury says it is analysing the feedback and that the outcome will be published on the consultation page¹. No date for that outcome has been reported¹.