PS26/1: Regulation of Deferred Payment Credit (unregulated Buy Now Pay Later)

Our final rules on the regulation of Deferred Payment Credit (DPC) will ensure that DPC borrowers have appropriate protections when using the product.

Read PS26/1 (PDF)[1]

What we are changing

DPC has been more commonly known as Buy Now Pay Later (BNPL).

DPC refers to an interest-free credit product, repayable in 12 or fewer instalments in 12 months or less and which is currently exempt from regulation. We refer to the product as DPC as this is the name given to it in the legislation that will bring it into regulation.

In addition, we already have rules for other regulated credit agreements with Buy Now Pay Later offers, for which we use the term BNPL. These are distinct from DPC.

From 15 July 2026, lenders who offer a DPC agreement to finance the purchase of goods or services from a merchant will come under our regulation. Merchants that offer their own DPC agreements directly will not. Nor will the broking of DPC agreements.

Our rules will make sure consumers are:

Given information that equips them to understand the potential risks, their obligations, rights and protections under a DPC agreement.
Able to borrow sustainably and affordably, miss fewer repayments and consequently be charged fewer late fees.
Given appropriate support if they are approaching, or are in, financial difficulty.

Who this is for

DPC lenders.
Consumers who use DPC.
Debt advisors.
Consumer groups and debt charities.
Merchants and other credit brokers that offer DPC as a payment option.
Industry groups and trade bodies.
The wider consumer credit industry.

Next steps

To prepare for regulation day on 15 July 2026, DPC lenders will need to consider our final rules and make the necessary changes to their systems and controls. Any firms undertaking DPC activity that do not currently hold the necessary consumer credit permissions will need to register for the Temporary Permissions Regime from 15 May.

Find out more about what your firm needs to do to prepare for regulation[2].

Firms with questions can contact us at [email protected], or be directed to the team via our pre-application support service (PASS), or other wider support services.

Background

DPC lending has grown from £0.06bn in 2017 to over £13bn in 2024.

When they work well, DPC products give consumers access to credit that is affordable, and offer a convenient way to spread payment for goods and services.

DPC is currently exempt from regulation. But on 14 July 2025, the Government legislated to bring DPC lending under our regulation, following concerns that borrowers were not getting sufficient information about DPC agreements and some lending being unaffordable.

In line with our strategy (PDF)[3], our approach seeks to help consumers navigate their financial lives while supporting sustained economic growth. Our rules aim to ensure that DPC borrowers get the right information, in the right way and at the right time.

First published: 11/02/2026 Last updated: 11/02/2026