Regulating Buy Now Pay Later (BNPL)

Who this applies to

DPC agreements provided by third-party lenders will become regulated credit agreements. This means that a DPC agreement will be regulated where:

• The lender and the supplier of goods or services are not the same person.
• There is an arrangement between a merchant and a lender, so that the lender becomes the legal supplier of goods and services to the customer.

DPC agreements provided by third-party lenders will not be regulated where they are:

• Used to finance premiums under contracts of insurance.
• Funding employee borrowing.
• Provided by registered social landlords to their tenants, leaseholders or, in Scotland, the shared owner under a shared ownership agreement to finance the provision of goods and services.
• Entered into before regulation day.  

The Government has decided that broking of DPC agreements will be exempt from regulation.

What firms need to do now

From regulation day onwards, any DPC lender who enters into a DPC agreement will need to:  

• Be authorised for the relevant consumer credit activities or have a temporary permission under the DPC temporary permissions regime (TPR).  
• Comply with our rules.  

Any DPC agreements entered into before regulation day will remain exempt.

If you think this will affect your firm, you should start preparing for regulation now. You should consider the final approach to regulation that we've set out in our Policy Statement (PS) and begin implementing the changes you'll need to make to your business.

What firms need to do later

If your firm doesn’t currently hold the relevant consumer credit permissions, you can enter the TPR. The TPR allows you to continue temporarily operating on and after regulation day while we consider your application for the necessary permissions.  

If you were not carrying on DPC activity on 15 July 2025, or you don't intend to continue carrying on DPC activity after regulation day, you don't need to register for the TPR.

Firms that aren’t authorised or do not have a temporary permission will continue to be able to service DPC agreements that were taken out before regulation day. Those agreements will remain exempt.

Temporary permissions regime

Your firm will only be able to enter the TPR where it meets all the following criteria. You:

• Have been carrying on a DPC activity (which will become a regulated activity on regulation day) on 15 July 2025 (the initial commencement date of the Government’s legislation).
• Have made the necessary notification.
• Have paid the relevant fee.

In line with the legislation bringing DPC into regulation, we made directions on 1 April 2026 setting out that:

• Firms can complete a notification form to register for temporary permission.
• The fee is £280.
• The last day on which firms can notify to register for temporary permission is 1 July 2026.

Firms must comply with the above requirements in order to be able to enter the TPR.

Read the directions (PDF) and complete our notification form (DOCX).

We have designed the registration process to be simple and straightforward, to support your transition into regulation.

If you think you'll need to enter the TPR and you haven't already done so, you should contact us by email at [email protected] so we can support you as you prepare for regulation.

Register of lenders with temporary permission

The following firms are registered for the TPR and can continue providing DPC after 15 July 2026:

• Access Fertility (Access Fertility Ltd)
• Clearpay (Clearpay Finance Ltd)
• Manchester Credit Union
• Medicred (Medicred Ltd)
• The Money Co-op (Metro Moneywise Credit Union)
• Oldham Credit Union
• PayItMonthly (PayItMonthly Ltd) 
• PLIM (PLIM Ltd) 
• PollenPay (PollenPay UK Ltd)
• Salford Credit Union Limited
• Zero Down Lease (Leasehold Finance Ltd)
• Zeropa (Zeropa Holdings Ltd)

Our aims for regulation

We want our regulatory regime for DPC to reduce the risks of harm to consumers. We want to be proportionate, so that the DPC market can continue to innovate and grow sustainably, and that consumers can still access DPC where appropriate.

We want DPC firms to operate to high standards and deliver good outcomes for consumers. As part of that, our proposed approach to regulation seeks to ensure that DPC lenders:  

• Give information to consumers that helps them make effective, timely and informed decisions about their DPC borrowing, both before they enter into an agreement and throughout its duration.
• Lend responsibly and affordably.
• Support customers who are facing financial difficulty.  

We also want better, more timely information about the DPC market and customer outcomes so that we can supervise firms effectively. Our proposals therefore include requirements for fully authorised firms to provide us with product sales data about their DPC lending.