Buy Now Pay Later is about to become a regulated product in the UK. From 15 July 2026, deferred payment credit (DPC) arrangements — the “pay in three” or “pay in 30 days” options offered at checkout through a third-party lender — fall under full Financial Conduct Authority oversight for the first time. The notification window for providers to register for temporary permission to keep operating closed on 1 July, and full rules apply from the 15th.

For years, BNPL sat in a regulatory grey area precisely because it was structured as short-term, interest-free deferred payment rather than traditional credit. That grey area is now closed. If your business offers a BNPL option through a third-party lender at checkout, this affects you even though you’re not the one being directly regulated.

What’s actually changing

The new regime requires BNPL lenders to run affordability checks before extending credit, give customers clearer information about repayment amounts and dates, offer proper support to customers in financial difficulty, and provide access to the Financial Ombudsman Service for complaints from 15 July onward. Existing providers not yet authorised for consumer credit can continue trading under a Temporary Permissions Regime while their full authorisation is assessed.

Importantly, the rules apply specifically where the lender is a separate business from the retailer — which covers most of the well-known BNPL providers UK retailers plug into. Merchants who simply offer BNPL as a payment option at checkout, without being the credit provider themselves, remain outside direct FCA regulation — but that doesn’t mean nothing changes for you.

Why retailers need to pay attention, not just lenders

Even as a merchant rather than a lender, your business is now associated with a regulated financial product at your own checkout. Three things are worth checking directly:

Your provider’s regulatory status. Confirm whether your BNPL partner has full FCA authorisation or is operating under the Temporary Permissions Regime, and what that means if their application is later refused. A provider that loses its ability to operate is a checkout option you’d need to remove at short notice.

Your customer-facing terms and disclosures. The affordability checks and information requirements are the lender’s responsibility, but your own terms and conditions, checkout copy, and marketing around “pay later” options should be consistent with a regulated product rather than describing it as a casual, risk-free add-on. Outdated wording here is a legal exposure worth closing before it’s tested by a complaint.

Your complaints process. Customers now have a formal route to the Financial Ombudsman Service through your BNPL provider. Make sure your own customer service team knows to direct payment-related complaints there rather than trying to resolve credit disputes themselves.

What happens if you do nothing

The risk here isn’t a fine landing on your desk — the FCA’s rules bind the lender, not the merchant, in most retail arrangements. The real risk is quieter and more commercial: a provider whose authorisation stalls under the Temporary Permissions Regime and has to withdraw from the market, checkout terms that describe a now-regulated credit product in casual, pre-regulation language, or a customer complaint that lands with your support team instead of the Ombudsman because nobody updated the internal process. None of these show up until a customer or a provider forces the issue, which is exactly why this is worth an hour of attention now rather than a scramble later.

Getting customer-facing terms and policies properly reviewed and updated is exactly the kind of task worth handing to a specialist rather than quietly rewriting internally — Smallprint offers ready UK legal document templates that make it straightforward to bring checkout and credit-related terms up to date without commissioning bespoke legal work for every change.

The takeaway

If BNPL sits anywhere in your checkout flow, don’t assume this is purely your payment provider’s problem to solve. Confirm their regulatory status, check your own terms reflect a regulated product, and make sure your team knows where a payment complaint should actually go — all before the rules take full effect on 15 July.