New Regulatory Guidance for Buy Now Pay Later Providers Ahead of Industry Reform

ASIC has released updated regulatory guidance to support the introduction of new laws governing the Buy Now Pay Later (BNPL) sector, ahead of changes due to take effect on 1 July 2025.

Summary of the New Guidance

The updated guidance clarifies how BNPL providers must comply with responsible lending obligations under the new regime, which brings BNPL products under the same legal framework as other credit products. Key areas addressed include:

• Assessing a customer’s capacity to repay
• Managing risk for vulnerable consumers
• Clearer disclosure of fees and repayment terms
• Aligning with existing credit licence obligations

Implementation Expectations

ASIC expects all BNPL providers to be prepared for full compliance by the July start date. Existing credit licensees offering BNPL services may need to adjust their procedures, while unlicensed providers will be required to obtain an Australian Credit Licence (ACL).

The reforms are aimed at improving consumer protections in a rapidly growing sector that has until now operated outside traditional credit laws.