New BNPL Regulations 15th July: Ecommpay warns about the checkout and reputational impact for merchants

As the interest-free instalment model behind most BNPL products comes under full FCA supervision from today – 15^th July 2026 – Ecommpay, the inclusive global payments platform, is urging merchants to double-check the regulatory readiness of their Buy Now, Pay Later (BNPL) partners and payment providers.

From ‘Regulation Day’, BNPL lenders must be FCA-authorised or registered under the Temporary Permissions Regime to continue trading legally. Lenders will be required to run affordability checks on every transaction – with the depth of assessment proportional to risk, including purchases under £50 where the current small agreements exemption is removed. They must provide clear upfront disclosure of payment dates, amounts and the consequences of missed payments, and follow a new arrears framework requiring prompt contact, reasonable notice before enforcement, and signposting to free debt advice. Consumers will also gain access to the Financial Ombudsman Service for eligible complaints about DPC (Deferred Payment Credit) agreements.

While the rules apply directly to lenders rather than merchants, Ecommpay is urging retailers to ensure their BNPL partners are fully compliant. While merchants themselves will not typically be in breach of FCA rules for a lender’s failings, working with a non-compliant provider could impact checkout performance and put their own brand reputation at risk.

“BNPL has always been credit – regulation is simply catching up,” explained Alpa Jotangia, Head of Compliance at Ecommpay. “And critically it isn’t just a technical change for BNPL providers; it changes the checkout conversation for everyone.

“The reality is that consumers don’t separate the lender, the payment provider and the retailer in their minds. They remember the checkout experience, the refund experience, and how they were treated when something went wrong. If a BNPL partner falls short, it’s the merchant’s brand that’s likely to be impacted.”

Ecommpay recommends that merchants with BNPL anywhere in their checkout take three steps:

1. Verify authorisation status. Confirm that every BNPL provider in the checkout is FCA-authorised or registered under the Temporary Permissions Regime by checking the FCA’s Financial Services Register.
2. Review the customer journey. Assess what information is shown at checkout, how clear repayment terms are, how affordability checks are handled, and what happens when a customer returns an item or falls into arrears.
3. Ask providers how they support compliance. A BNPL lender should be able to demonstrate how it meets its regulatory obligations when offering credit to consumers — from disclosure and refund handling to identifying and supporting vulnerable customers.

“The payments industry has spent years removing friction from checkout, but friction is not always failure when it comes to offering credit – sometimes it’s protection,” added Alpa Jotangia. “The winners in the regulated BNPL market will be the providers that make responsible credit feel clear, intuitive and proportionate, and that’s where payments expertise matters.

“Payments service providers like Ecommpay can help merchants ensure their payment journeys work smoothly alongside compliant BNPL offers, delivering a checkout that converts. The next phase of BNPL won’t be defined by who has the most prominent button at checkout – it will be defined by trust.”

Ecommpay works with merchants to optimise payment journeys and ensure they are aligned with best practice, without sacrificing conversion, combining operational expertise with checkout optimisation across more than 100 payment methods worldwide.

Merchants should seek independent legal/compliance advice regarding their specific obligations in relation to BNPL arrangements

Key facts on the new BNPL regime (effective 15^th July 2026):

• Deferred Payment Credit (DPC) – interest-free, short-term instalment credit – comes under full FCA regulation from 15^th July 2026
• Lenders must hold FCA authorisation or have registered for the Temporary Permissions Regime; operating unauthorised after ‘Regulation Day’ is a criminal offence under section 23 of the Financial Services and Markets Act 2000.
• Affordability checks become mandatory at every transaction value, with an outcomes-based approach allowing the depth of the check to flex with risk.
• New disclosure requirements mandate upfront, plain information on payment dates, amounts and missed-payment consequences.
• Under the FCA’s CONC provisions for DPC’s, lenders must contact customers promptly about missed payments, give reasonable notice before enforcement action, and signpost free debt advice.
• Eligible DPC agreements entered into from 15^th July may benefit from connected lender liability (subject to conditions set out in the legislation), and consumers gain access to the Financial Ombudsman Service.