The Financial Conduct Authority (FCA) has announced that Deferred Payment Credit, often referred to as ‘buy now pay later’ (BNPL), now falls under its remit.
Lenders will need to be authorised by the regulator to provide BNPL products, and they will also be subject to the Consumer Duty, which requires financial firms to put customers at the heart of what they do and is overseen by the FCA.
Under the stronger protections that have been introduced, BNPL customers must be given clearer information and undergo proportionate affordability checks.
Buy now Pay later
Buy now Pay later is form of short-term financing, which has become increasingly popular in the last number of years. Rather than paying the full amount for a purchase, BNPL allows consumers to spread the cost into smaller interest-free amounts over a short period of time. The difficulty comes when providers charge a fee for any missed payments, which can quickly accumulate if more are unpaid. In Northern Ireland, Advice NI’s data reveals a sharp increase in the number of people using the credit method. Its consumer debt service dealt with £80,000 related to this type of debt alone in 2025, up 61 per cent on 2024.
Interim Chief Executive of Advice NI, Fiona Magee, said, “We welcome these important changes. They will deliver stronger rights and clearer protections for consumers. Many of the clients we have supported with Buy Now Pay Later debt haven’t fully read the terms and conditions that they accepted with the lender. For instance, the interest rate for unpaid instalments can range from 18 to 30 per cent. In today’s challenging economy, we need to prevent people from accumulating unaffordable debt. We commend the FCA for its dedication to this issue.”
Sinead Campbell, Head of Debt, Money and Quality at Advice NI said, “Since 2019, our debt service, supported by the Department for Communities, dealt with 25,894 clients with £301m in debt. There is a clear upward trend in the number of people falling into debt because the cost of living outweighs their household budget. The most common causes of debt are housing, household bills, childcare, and high interest lending often taken out to cover other essentials such as food. Not only are more people in debt, but more people are likely to be at risk of debt too, and we must do more to help break this cycle.”
Advice NI is urging those in need of financial support to reach out for help early.
Sinead concluded, “Debt can be complex, and we recognise that reaching out for help can be daunting, but our advisers provide a free, confidential, and impartial service. We are here to help. Every day we see the detriment that debt can have on people’s wellbeing and our aim is to alleviate the burden – there is no need to feel shame or judgement.”
