Regulations have changed for buy now pay later services

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BNPL services are now being regulated more like traditional credit products such as credit cards. Previously, BNPL services weren’t regulated under the National Consumer Credit Act, leaving a gap in consumer protection. But now, all BNPL providers need to hold an Australian credit licence and comply with consumer protection requirements.

This means your BNPL provider needs to:

• hold a credit licence (or have applied for one by 10 June 2025);
• be a member of the Australian Financial Complaints Authority (AFCA);
• follow responsible lending practices; and
• meet other consumer protection requirements.

You can verify registrations on Australian Securities and Investments Commission’s Professional Registers Search.

The new framework recognizes that BNPL services are generally lower-risk than traditional credit products. Most BNPL arrangements will be regulated as “low-cost credit contracts”, with modified requirements that balance consumer protection with the unique features of BNPL services.

Providers must meet responsible lending obligations when agreeing to a BNPL contract or credit limit increase for you, which generally includes seeking and verifying certain information about your financial situation and assessing their products suitability. You can ask to see the assessment your provider makes about your credit contract or limit increase; they must provide you with a free, written copy on request.

While BNPL services offer convenient payment options and support thousands of local jobs, these new regulations are designed to help prevent debt spirals and ensure you have proper protections when using these popular payment methods.

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