Jurisdiction(s):
United Kingdom

FCA’s BNPL (DPC) regime: scope, CCA disapplication, Temporary Permissions Regime, SM&CR, financial promotions, section 75, and unresolved issues before UK rules commence by end‑2026

Published on: 26 June 2025

Published by a Law360 reporter

Legal News

Article summary

The government has also tabled draft legislation in Parliament. Once the statutory instrument (SI) is approved, BNPL products will be regulated 12 months after the SI is made. Lenders should expect the framework in force by end-2026. Although the policy trajectory is set, several key points remain unresolved.

Key aspects of BNPL Regime

Going forward, regulated BNPL agreements will be called regulated deferred payment credit agreements—deferred payment credit, or DPC.

Scope

In a boost for merchants, BNPL will be regulated only where a third-party lender is involved.
An anti-avoidance measure tackles reseller-style models: where a lender buys the goods and resells them as the merchant, the deal is regulated, not exempt.
Most merchants offering DPC will not need FCA authorisation as credit brokers.
Unauthorised merchants must have financial promotions approved by an authorised firm—usually the third-party lender, if it holds the relevant permission.
The broking exclusion does not currently extend to domestic premises suppliers; this remains under review after late-stage feedback...

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