BNPL providers will have to provide consumers with data regarding their loans. Credit: NordWood Themes on Unsplash.

The UK government has opened a consultation on draft legislation for regulating the country’s booming buy now, pay later (BNPL) industry.

The eight-week consultation looks to bring the nation’s BNPL sector under the purview of the Financial Conduct Authority.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

BNPL providers, including Klarna, Clearpay and PayPal, must provide consumers with data regarding their loans, once the regulation comes into force. These firms will also have to offer credit to their customers at affordable rates.

In addition, users will be able to lodge complaints with the Financial Ombudsman Service.

The UK economic secretary Andrew Griffith said: “People should be able to access affordable credit, but with clear protections in place.

“That is why these proposed regulations are so important.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

After closing the consultation, the government will bring in new legislation for the BNPL segment.

The latest move comes after the government issued a consultation response in June last year for launching proposals to regulate the BNPL sector.

The UK economic secretary to the Treasury John Glen then said: “Buy-Now Pay-Later can be a helpful way to manage your finances but we need to ensure that people can embrace new products and services with the appropriate protections in place.

“By holding Buy-Now Pay-Later to the high standards we expect of other loans and forms of credit, we are protecting consumers and fostering the safe growth of this innovative market in the UK.”