techUK news and views
18 Oct 2024

Regulation of Buy-Now, Pay-Later: Consultation on draft legislation (October 2024)

 

Buy-Now, Pay-Later payment methods increase the flexibility for customers when purchasing products, through the use of Klarna, Paypal, and other onsite services. Through delaying and splitting payments, it allows buyers to reduce the cost of their upfront payment and help manage their outgoings month-to-month.  

Despite the growing popularity in their use in recent years, before now, such services are not protected by regulations and come with significant risks, which vary from charging interest to affecting users’ credit score. 

On 17 October 2024, the Government opened a consultation on draft legislation to bring Buy-now, pay-later products into legislation. The proposals to fix this will be supervised by the Financial Conduct Authority (FCA) and will apply the Consumer Credit Act, ensuring users receive clear information, avoid unaffordable borrowing, and have solid rights if there issues.  

The new rules will ‘ensure those who find BNPL helpful can still benefit from it, firms can innovate and consumers are appropriately protected’ according to the FCA. 

The consultation will be open until 29 November 2024 and once the feedback has been gathered the Government will bring forward legislation as soon as possible, coming into effect 12 months there after. 

You can find out more information on this here. 

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Ella Gago-Brookes

Ella Gago-Brookes

Team Assistant, Markets, techUK

Ella joined techUK in November 2023 as a Markets Team Assistant, supporting the Justice and Emergency Services, Central Government and Financial Services Programmes.  

Before joining the team, she was working at the Magistrates' Courts in legal administration and graduated from the University of Liverpool in 2022.  Ella attained an undergraduate degree in History and Politics, and a master's degree in International Relations and Security Studies, with a particular interest in studying asylum rights and gendered violence.  

In her spare time she enjoys going to the gym, watching true crime documentaries, travelling, and making her best attempts to become a better cook.  

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