Buy Now Pay Later to be Regulated by FCA

Published / Last Updated on 20/02/2023

The Government has finally confirmed that the Buy Now Pay Later industry is to be fully regulated by the Financial Conduct Authority after initially proposing this in 2021.

Currently, the FCA only has powers to force Buy Now Pay Later to amend rules or contracts under Consumer Rights laws.

New proposed laws are expected to pass through the House of Commons and Lords by the end of this year, with full regulation of the buy now pay later industry in 2024.

FCA regulation will mean:

Firms must act in accordance with all FCA Conduct of Business Sourcebook (COBS) rules like all other regulated firms including the new consumer duty rules.

Borrowers and lenders will be subject to strict suitability and affordability checks just like any other loan or mortgage.

Borrowers will be able to make complaints with the full protection of the Financial Ombudsman Service (FOS), where any FOS decision is legally binding on a regulated firm.


‘Buy now pay later’ is usually buying something today but paying back in instalments over a given period with interest usually charged.  Consumers need to be protected and informed about debt that they are taking on and what they are paying.  Equally, lenders need to check the borrower can afford the debt they take on and continue to be able to fund it.

By regulating ‘buy now pay later’, you will at least know what your borrowing costs are, and we assume it will make lenders more aware of who they are lending too as well as affordability to stop vulnerable people getting into further debt that they can ill-afford.  Becoming FCA regulated is long overdue but very welcome.

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