With just three months until new buy now pay later (BNPL) regulations come into force on 15 July 2026, RSM UK warns firms need to ensure they are fully prepared for the changes now, or face no longer being authorised to provide credit to consumers.

Zoe Morton, Consulting Director at RSM UK said: “Firms providing interest-free credit to consumers have a limited amount of time remaining to prepare for the new deferred payment credit or BNPL regulations. Failure to adhere to the rules, and not being authorised by the FCA to provide consumer credit, could mean they’re no longer able to sell the product, and are at risk of fines, or even potential closure.

“With growing adoption of AI in the financial services industry, firms may be tempted to increase their use of the technology to prepare for and meet the ongoing requirements of the new BNPL regulations, such as carrying out affordability checks of consumers. However, this cannot come at the detriment of the consumer. Firms must ensure that the right support is there for consumers in line with the FCA’s Consumer Duty.”

Jacqui Baker, Partner and Head of Consumer Markets at RSM UK, added: “As cost pressures rise and discretionary incomes are squeezed, some consumers may become more reliant on BNPL, so it’s essential the buying process remains as seamless as possible, or we could see a shift in behaviour. While the new regulations are aimed at protecting consumers, if the process of taking out credit becomes too stringent, some may decide to seek alternative forms of credit. This could prompt more BNPL providers to diversity their product offerings to remain competitive. We’ve already seen companies like Klarna venture into the credit card market and are likely to see others follow.”

RSM UK recommends firms should be taking the following steps now to prepare for the new regulations:

• Set up a project team to oversee the authorisation process, which should include undertaking a gap analysis of the changes.
• Review FCA final rules and conduct a full readiness assessment.
• Obtain FCA consumer credit permissions, or register for the Temporary Permissions Regime (from 15 May 2026).
• Align systems and governance with the requirements of the Consumer Duty.
• Redesign and implement all product and disclosure communications.
• Build and test creditworthiness and affordability checks.
• Create and/or review arrears, missed payment and enforcement processes.
• Implement the FCA’s dispute resolution (DISP) complaints handling rules.
• Prepare data reporting systems and processes for regulatory returns.
• Seek independent assurance over activity pre and post implementation of the changes.

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