The Financial Conduct Authority (FCA) has announced plans to regulate the growing £13 billion 'buy now, pay later' (BNPL) sector, which will require lenders to conduct affordability checks on loans below £50. This is in response to concerns over consumer debt, as BNPL has transformed from a niche product to a common payment option for 10.9 million UK adults. Many users face debts, with over half of agreements involving amounts under £50. The FCA aims to safeguard consumers against financial harm, especially among younger and vulnerable populations.
The Financial Conduct Authority (FCA) has unveiled plans to regulate the burgeoning £13 billion 'buy now, pay later' sector, requiring affordability checks on small loans.
BNPL lenders would need to conduct creditworthiness assessments on loans under £50, aiming to protect consumers from spiraling debt and financial harm.
The FCA noted the rapid expansion of BNPL, which is used by 10.9 million UK adults, raising concerns about its impact on financially vulnerable consumers.
Sarah Pritchard emphasized the need for consumer protection in the BNPL sector, ensuring that the flexibility offered does not compromise financial safety.
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