What the changes to Buy Now Pay Later mean for you

If you use Buy Now Pay Later (BNPL), you’re not alone. More than 2 in five people have used it to spread the cost of shopping and manage cash flow.

Buy Now Pay Later (BNPL) is a type of short-term credit that lets you split a purchase into instalments or delay payment, usually interest-free.

From 15 July 2026, new rules apply to this form of borrowing. These changes are designed to give people more protection when using some BNPL products.

BNPL products offered by companies like PayPal, Clearpay, Zilch and Klarna are now regulated by the Financial Conduct Authority (FCA), bringing them more in line with other forms of credit like credit cards and personal loans.

To qualify the BNPL product must:

• be from a third-party BNPL provider such as Klarna, Clearpay or PayPal (it can’t be a BNPL product offered directly by a retailer)
• have been taken out on or after 15 July 2026.

Before offering you BNPL, providers must check you can afford to pay back what you borrow. 

This does mean some people may find it harder to access BNPL than before. But the aim is to help prevent people taking on borrowing they can’t afford and reduce the risk of problem debt.

BNPL providers must give you clear information before you borrow. This includes detail such as:

• how much you need to repay
• when repayments are due
• any fees or charges that could apply if you miss a payment.

Having this information up front can help you decide whether BNPL is the right option for you.

If you’re finding it difficult to make repayments, lenders must offer appropriate support.

They’ll give you notice before taking any action and communicate clearly about your next steps.

If something goes wrong, you’ll have the right to complain about your BNPL provider.

You’ll now be able to the free and impartial Financial Ombudsman Service if you’re not happy with how the firm responds to your complaint. And in some cases, you’ll be able to get a refund under Section 75 of the Consumer Credit Act.

BNPL can be a useful way to spread the cost of a purchase. However, as with any form of borrowing, you need to be aware of the risks – read our guide on What is Buy Now Pay Later? to find out what you need to know before using it.

Before using BNPL:

• check when repayments are due
• make sure you have enough money available to cover them
• understand any fees or charges for missed payments
• consider whether there are other ways to pay that might suit you better – or even if you can hold off the payment and save up for the purchase.

The new rules only apply to ‘third party’ providers – such as Klarna, Zilch, Clearpay or PayPal.

This is when you buy something from a retailer, but the credit is provided by a separate company.

Some retailers will offer their own instalment or credit arrangements directly. These aren’t regulated so you won’t benefit from the same protections.

You can check if a BNPL provider is regulatedOpens in a new window on the FCA firm checker.