The UK’s Financial Conduct Authority will bring buy now, pay later under formal regulation on July 15, requiring lenders like Klarna, Clearpay, and PayPal to be FCA-authorized and to run proportionate affordability checks before extending credit. BNPL agreements will fall under the FCA’s Consumer Duty, meaning clear upfront terms on payments and missed-payment consequences, mandatory support and free debt-advice referrals for struggling customers, and the right to escalate complaints to the Financial Ombudsman. Purchases between £100 and £30,000 will also gain Section 75 protection, the same safety net credit cards carry. FCA deputy chief Sarah Pritchard said the goal is proportionate protection for the 11 million Britons who use BNPL without lending to people who can’t repay, in a market that topped £13B in 2024.
