BNPL is moving under FCA regulation in 2026.

BNPL is moving under FCA regulation in 2026. What it could mean for lenders, merchants, and collections

Buy Now Pay Later, which the Government and FCA now call Deferred Payment Credit, will move under FCA regulation in mid-2026. This is no longer a vague direction of travel. Legislation has been made and the FCA has published a detailed consultation on the rulebook it plans to enforce. The centre of gravity is shifting from light-touch arrangements to full affordability, fair treatment, and real accountability. GOV.UKFCA+1

The timeline at a glance

• Government has legislated to bring Deferred Payment Credit into the FCA’s perimeter. The policy intent is to end a regulatory gap and introduce stronger consumer protections. GOV.UK

• FCA consultation CP25/23 sets out the proposed regime. The consultation opened on 18 July 2025 and closes on 26 September 2025. FCA

• Target go-live is 15 July 2026. Expect a Temporary Permissions Regime so in-scope lenders can transition in an orderly way. www.hoganlovells.comSkadden

What the FCA is signalling

From the consultation and supporting materials, firms should plan for the following themes.

• Affordability and creditworthiness checks for DPC. Lenders will need to evidence that customers can repay and that loans are suitable, even for small ticket amounts. FCAThe Guardian

• Support for customers in difficulty. Firms will be expected to identify stress early, offer appropriate help, and handle forbearance well, aligned with the Consumer Duty. FCA+1

• Clear, timely disclosures. Simpler, prominent information at the point of sale and better post-contract communications, consistent with the Duty’s outcomes focus. FCA+1

• Routes to redress. BNPL borrowers will be able to complain to the Financial Ombudsman Service and, where relevant, rely on Consumer Credit Act rights. FCAGOV.UK

• Regulatory data and oversight. Expect more structured returns across credit, debt adjusting, and counselling as the FCA improves sightlines on harm. FCA

Likely implications for the market

This is where sentiment across the industry is converging, and where your plans may need adjustment.

• Product design will harden. “Free” instalments offered without checks are likely to narrow. Expect greater friction at checkout, balanced against Duty requirements to avoid sludge. Winners will be those who make compliant journeys fast and human. FCA+1

• Risk moves on-balance-sheet. Bringing DPC inside the perimeter pushes firms to manage provisioning, arrears, and recoveries with the same discipline as other regulated credit. That drives a premium on data quality and collections hygiene. FCA

• Merchant expectations will reset. As affordability checks become normal, merchants will judge providers on approval quality, not just approval rate. Conversion at any cost is out. Sustainable approvals are in. FCA

• Compliance budgets will rise. Authorisation, systems changes, training, and MI will bite through 2025 to mid-2026. Firms that already operate Duty-grade controls are better placed. FCA

What this could mean for debt management

The FCA is tightening expectations on how firms prevent and handle financial difficulty across the credit lifecycle. That includes early-warning indicators, faster routing to support, and clearer options for repayment once a customer has missed a payment. As DPC becomes regulated, expect consistency with the FCA’s wider approach on arrearS. The practical effect is a nudge away from punitive enforcement and toward structured, affordable repayment arrangements that customers can actually keep. FCA+1

Programmable-payments

Raimac’s focus is on programmable payment plans designed to reflect affordability and adapt to real-life events such as income dates or verified hardship. As regulators and markets increasingly require lenders and merchants to demonstrate that customers are offered fair and sustainable paths out of arrears, Raimac provides the right toolset: programmable schedules, automated nudges, and evidence-backed repayment structures.

With Raimac, consumers can decide at the point of purchase what they can afford and set repayment schedules tailored to their individual circumstances. Programmable triggers can also incorporate external events—defined by either the merchant or the consumer—ensuring that every plan remains flexible, affordable, and fair.

Key FCA and Government materials

• FCA hub on regulating Buy Now Pay Later. First published 18 July 2025. Sets out what firms should do to prepare. FCA

• CP25/23 consultation on Deferred Payment Credit. Opens 18 July 2025. Closes 26 September 2025. FCA

• Government announcement on new rules for BNPL and the rationale for bringing DPC into regulation. Published 2025. GOV.UK

• FCA press summary on protections for BNPL borrowers. Confirms affordability checks and support for customers in difficulty.