Government publishes BNPL consultation response and confirms it will bring BNPL into regulation

HM Treasury published its response to the consultation on draft buy now pay later (BNPL) legislation on 19 May 2025, and confirmed it will proceed to lay the draft affirmative statutory instrument, The Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025, to bring BNPL products into regulation¹.

The consultation, published on 17 October 2024, ran until 11:59pm on 29 November 2024 and has now concluded¹. It followed an earlier HM Treasury consultation that ran between February and April 2023¹. The government said its plans aim to ensure people using BNPL products receive clear information, avoid unaffordable borrowing, and have strong rights when issues arise, and that its approach will maintain access to a popular product while adding safeguards¹.

On the feedback received, the government said:

The government also set out one change to its proposals. Following further industry and Financial Conduct Authority engagement, it has decided to exempt domestic premises suppliers from requiring credit broking permissions to offer BNPL products as payment options¹.

The page recording the consultation has been updated several times: on 19 May 2025 with the consultation response, on 21 May 2025 with the draft Order, and on 16 June 2025 with a link to an update on domestic premises suppliers and BNPL¹. The government response document runs to 30 pages and the draft Order to 16 pages¹.

Why it matters for households

BNPL is currently used by millions of people across the UK, and the government states that without regulation there are risks¹. The stated aims of the regime are that users receive clear information, avoid unaffordable borrowing, and have strong rights when issues arise¹. Bringing BNPL products into regulation under the Order would place them within the scope of the Financial Services and Markets Act 2000 framework, though the sources do not set out the detailed conduct rules firms would face or the date on which the regime would take effect for consumers. The exemption for domestic premises suppliers means businesses selling from their own premises would not need credit broking permissions to offer BNPL as a payment option¹. No commencement date for the new regime has been reported in the sources.

What happens next

The government will proceed to lay the draft affirmative statutory instrument before Parliament¹. The draft Order was published on the consultation page on 21 May 2025¹. Because the instrument is affirmative, it requires parliamentary approval before it can come into force, but the sources do not give a date for the debate or for implementation. Further detail on how BNPL works and the main providers is set out in the site's guide, and the wider framework for financial regulation in the UK explains how statutory instruments of this kind are made and scrutinised.