From 10 June 2025, significant regulatory changes will take effect for Buy Now, Pay Later (BNPL) services, enhancing consumer protections and aligning BNPL with traditional credit products like credit cards.
Previously, BNPL services operated outside the National Consumer Credit Act, leaving a gap in consumer protections. However, under new laws passed in late 2024, BNPL providers must now comply with stricter regulations, including:
- Holding an Australian credit licence (or applying for one by 10 June 2025);
- Membership with the Australian Financial Complaints Authority (AFCA);
- Adhering to responsible lending obligations; and
- Meeting additional consumer protection standards.
While BNPL services remain lower risk than traditional credit products, most arrangements will now be classified as “low-cost credit contracts” with tailored requirements to balance consumer protection with the flexibility BNPL offers.
From 10 June 2025, you can verify whether your BNPL provider is licensed through the Australian Securities and Investments Commission (ASIC) Professional Registers Search.
These reforms aim to protect consumers while maintaining innovation and competition in the BNPL market. Stay informed to ensure you continue using BNPL services responsibly and effectively. If you have any questions about how these changes may affect you, feel free to reach out to our team.