UK FCA BNPL Regulations 2025: What Merchants Must Know
We first wrote about the FCA’s plans to regulate Buy Now, Pay Later (BNPL) in the UK when proposals were still taking shape. Now, with the changes confirmed and regulation beginning in July 2026, it’s time for an important update. These new rules will require BNPL providers to follow many of the same standards as traditional lenders, introducing affordability checks, clearer disclosures, and stronger consumer protections.
If you’re a merchant offering BNPL at checkout, or considering it, these changes matter. Let’s break down what’s happening and how Splitit helps you stay ahead of the curve.
What’s Changing?
Here are the key takeaways from the FCA announcement:
- Regulation begins 15 July 2026: BNPL products will be classified as Deferred Payment Credit and brought under Financial Conduct Authority regulation.
- Affordability checks required: BNPL providers will need to assess whether a customer can genuinely afford to repay, even for purchases under £50.
- Clear communication at checkout: Merchants must display key product information, including items like the rate of interest, number, frequency and amount of payments and consequences of missing payments.
- Support for customers approaching or in financial difficulty: Providers will be expected to encourage consumers to engage with the lender, and give sources of free debt advice for those struggling to keep up.
- Dispute resolution rights: Customers will be able to escalate complaints to the Financial Ombudsman Service.
- Consumer Credit Act: Third-party lenders who offer the product will need to become authorised and comply with FCA rules and applicable provisions of the CCA.
In short, BNPL can no longer operate in a regulatory grey area. It will be pulled clearly under the umbrella of regulatory oversight.
What This Means for UK Merchants
These new rules bring clarity, but also complexity. If you’re currently offering BNPL, or exploring it, here’s what to expect:
- Operational disruption (probably short-term): Traditional BNPL providers may need to redesign their checkout flows to incorporate affordability checks and detailed disclosures. This could introduce new friction at checkout, leading to basket abandonment or longer transaction times.
- Increased oversight: You may be asked to update your site or checkout integrations to comply with new information display requirements. That could involve coordination with payment partners, legal teams, and possibly retraining staff.
- Compliance risk: Even though the regulatory responsibility falls largely on the provider, your brand could be affected if customers have a poor experience or lodge complaints. The reputational risk is real.
That’s where working with the right partner makes all the difference. Splitit’s unique card-linked instalments solution already avoids the common pain points and regulatory hurdles because we don’t extend new credit. Our model is designed for simplicity, clarity, and compliance.
Why Merchants Are Turning to Splitit
Splitit is uniquely positioned to help you thrive under the new regulations. That’s because our model is fundamentally different from traditional BNPL solutions.
- We don’t issue new loans: Splitit uses the shopper’s existing available credit on their card to split payments into flexible instalments.
- No additional applications or credit checks: Customers don’t need to apply for new credit lines or worry about extra repayment plans.
- Full transparency: Each instalment appears on their usual credit card statement, right alongside their other purchases, so nothing gets lost or forgotten.
- Built-in protection: Since the payment is processed as a standard credit card transaction, consumers already benefit from Consumer Credit Act protection.
What does this mean for your business? Less friction. Less compliance risk. More trust at checkout.
Future-Proof Your Checkout
BNPL regulation is no longer “on the way”, it’s now firmly in motion. If you’re a UK merchant, now is the time to assess how your checkout experience will be affected.
Splitit offers a future-proof alternative. We help you deliver the flexible payment options customers expect, while keeping the experience simple, transparent, and fully aligned with upcoming regulations.
No new loans. No hidden risks. Just a smarter, safer way to offer instalments.
Want to learn more? We’d be happy to walk you through how Splitit fits seamlessly into your existing checkout and helps you stay one step ahead of the July 2026 changes. Get in touch.
The new BNPL rules are coming. Are you ready?
2026 brings sweeping regulatory changes. Our checklist helps you assess your current BNPL setup and understand how Splitit’s card-linked approach keeps you one step ahead.
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