New buy now pay later rules bring extra protection for consumers, but firms face revenue squeeze
The new buy now pay later (BNPL) regulations come into force on 15 July 2026, meaning firms that are not FCA registered will no longer be authorised to provide credit to consumers from this date. RSM UK says while this is good news for consumers, credit providers are likely to face a short-term hit to their bottom line.
Zoe Morton, Consulting Director at RSM UK said: “Regulating buy now pay later credit firms gives more protection to consumers in line with the Consumer Duty rules, as it adds more opportunities to ensure customer understanding and affordability checks prior to purchase. For credit providers however, this is likely to impact their revenues - at least in the short term - as greater friction at the checkout means fewer transactions will be completed.
“These new rules also bring many firms under the Senior Management Regime for the first time, meaning directors, CEOs and compliance heads can now be held personally accountable if things go wrong. This brings enormous new responsibilities, as any breach of the rules can potentially carry unlimited fines, and even a lengthy prison sentence. It’s therefore imperative that firms have the right control frameworks in place to ensure they’re fully compliant.
“Firms entering the FCA-regulated payments market should not assume existing AI tools remain fit for purpose. Governance, oversight and customer outcomes should all be reassessed through a regulatory lens.”