Watchdogs promise better safeguards for buy now pay later shoppers

The Financial Conduct Authority has set new safeguards for buy now, pay later services, including clearer payment information and affordability checks, and the sector will be regulated from July 15.

Regulators have announced new protections for people who use buy now, pay later services. These options let shoppers spread the cost of purchases at online checkouts or in stores. Concerns have grown that some users could overstretch themselves and face borrowing problems. The Financial Conduct Authority has outlined measures intended to prevent problem debt. Key details: - The FCA has set safeguards that include clearer information for customers about payment dates, amounts, and consequences of missed payments, and requires affordability checks before lending. - The BNPL market was worth over £13 billion in 2024, and a survey cited about 20% of UK adults used BNPL in the 12 months to May 2024. - The sector will come under FCA regulation from July 15, and providers will need to be authorised by the regulator. Summary: The announced measures are intended to give shoppers clearer terms and limit the risk of borrowing problems. The rules create regulatory requirements for providers, with the authorisation process and formal regulation due to take effect from July 15.