From next month, new pay later protections will come into force for British consumers.
However, companies should not focus solely on the beginning of those regulations,” Alison Walters, director of consumer finance at the UK Financial Conduct Authority (FCA), said in a press release. letter Thursday (June 25) at Credit Week: Powering the future of finance It happened.
“The real test is what happens after that point,” she said of the new regulation. “We want companies to ensure consumers have the right information, at the right time, to make informed decisions.”
The new regulations are scheduled to come into force on July 15 and aim to bring the pay-later system into a more formal supervisory structure. Among the new rules is requiring lenders to conduct checks to ensure creditworthiness and affordability before offering BNPL loans.
“We recognize that there may be some consumers who use BNPL regularly who find it difficult to access once affordability checks are done,” Walters said.
“However, we believe it is important that people do not build up unsustainable levels of debt. If a consumer experiences financial difficulties, under our rules, BNPL providers will be expected to offer them support, including indicating free debt advice.”
Writing about the new BNPL regulations earlier this month, PYMNTS noted that their timing “is important because consumer payment behavior has changed.” Become multifacetedAnd service providers respond in kind.”
For example, Visa Last month it launched a UK partnership with nothing and porridge To support flexible Visa credentials, which allow you Multiple funding sources Sit behind a single credential while allowing consumers to decide how they want to pay at the point of purchase.
“The development reflects a broader trend,” PYMNTS added. “Consumers are increasingly choosing payment methods according to the circumstances of a particular transaction rather than relying on a single preferred product. Installment, debit, credit and other payment options have become interchangeable tools used for different purposes.”
Meanwhile, recent PYMNTS Intelligence research looked at how financial pressures are changing how consumers use BNPL. to Financially stable familiesBNPL is often seen as a source of convenience and quick approval at checkout. But for people on tighter budgets, postpaid offerings serve a broader purpose by helping those consumers cover short-term liquidity needs and manage cash flow.
“This does not necessarily indicate distress,” PYMNTS wrote. “Rather, it reflects a practical response to an environment where… Income growth and inflation “Continue moving at a close distance.”
