FCA consulted on draft rules for BNPL firms

The Financial Conduct Authority sought feedback on its draft rules and guidance for buy now pay later firms, in a consultation on the regulation of deferred payment credit (DPC), known by public convention as buy now, pay later or BNPL¹. The Government has legislated to bring BNPL within FCA regulation beginning from summer 2026¹.

StepChange, the debt charity, published its response to that consultation in September 2025¹. It said it campaigned for and welcomed the Government's commitment to BNPL regulation, and described the product as offering "an accessible form of income smoothing for retail expenses, with fixed repayments on a clear schedule over a short timeframe and is interest-free"¹. It also set out concerns raised by itself and the wider consumer sector: risks of unaffordable lending and the impact of late fees on consumers in difficulty; low consumer understanding of BNPL as a form of credit; product placement and low friction design that encourages consumers to spend more than they mean to; and inconsistent support for borrowers in difficulty¹.

The charity said it is relatively common for consumers to "stack" BNPL loans, and that the FCA's rules "look poorly specified for this kind of repeat and concurrent lending by individual firms", which it said risks ambiguity that leads to unaffordable lending¹. It added that identifying where affordable lending transitions into unaffordable lending is critical from a problem debt perspective, and called for clearer expectations from the regulator where BNPL interacts in novel ways with its rules¹.

On post-arrears communications, StepChange said the FCA wants firms to give customers who have missed repayments information about sources of free debt advice, at the right time and in a standardised form, but that it does not think the rules as drafted will deliver those objectives¹. It said it has called for the FCA to be more prescriptive in the timing and content of post-arrears communications while retaining sufficient flexibility for firms to design effective approaches to engaging customers in difficulty¹. It also said it would like the FCA to go further in setting expectations for firms whose products, like BNPL, pose higher risks of exploiting behavioural bias, noting that the Consumer Duty introduced new rules requiring firms to avoid causing foreseeable harm, including through exploiting consumer behavioural bias or vulnerability¹.

The consultation outcome, and the final rules and their start date, have not been reported in the material available.

Why it matters for households

BNPL sits outside full FCA regulation until the regime takes effect from summer 2026¹. Until then, the draft rules under consultation are not in force, so the creditworthiness and affordability checks, and the post-arrears communications, that StepChange discusses are proposals rather than requirements firms must currently meet¹. Households using buy now pay later are therefore affected only once the rules are finalised and commence, and the detail of what firms must do on affordability and on contacting borrowers who miss repayments is still being settled¹. The charity's response focuses on two groups in particular: people who hold several BNPL loans at once, and people who fall behind on repayments¹. The deferred payment credit regime is the framework that will apply.

What happens next

The FCA's final rules and guidance for BNPL firms, and the exact commencement date within summer 2026, have not been reported¹. The regulation process continues, with the Government's legislation already in place to bring BNPL within FCA regulation from summer 2026¹.