Greater than 10 million UK shoppers who use BNPL credit score companies will acquire extra protections beneath new laws outlined by the federal government in an effort to forestall unaffordable borrowing.
Beginning in 2026, BNPL companies comparable to Klarna and Clearpay might want to make upfront checks to ensure shoppers can repay what they borrow, present fairer and sooner entry to refunds in addition to the suitable to complain to the Monetary Ombudsman.
These guidelines deliver BNPL according to different credit score merchandise, the Treasury introduced as we speak (19 Could) as the federal government revealed its response to the session on BNPL companies, which was introduced in October 2024.
The regulation of BNPL “marks a shift within the retail panorama”, stated Jacqui Baker, accomplice and head of client markets at restructuring agency RSM UK.
“BNPL continues to be a distinguished device for shoppers as they search for extra flexibility when procuring. Retailers might want to take into account the right way to steadiness seamless checkout experiences with higher transparency and client safety, working with suppliers to adapt to a extra regulated and aggressive credit score setting,” she added.
Drapers’ newest Related Client 2025 report, which surveyed 2,000 UK shoppers, discovered that whereas “purchase now, pay later” (BNPL) utilization has softened total to 12% in 2025, it stays common with 62% of 25-to-34-year-olds.
