From 15 July 2026, deferred payment credit (DPC), the new regulated term for buy now pay later (BNPL), becomes a regulated activity in the UK.

The headline change affects BNPL lenders, who must hold the appropriate FCA permission from that date or stop providing DPC. The wider read-across affects anyone with exposure to UK consumer credit receivables, including investors, arrangers and servicers in securitisations that include BNPL pools.

Key UK BNPL regulation dates

15 May 2026: FCA temporary permissions registration window opens

1 July 2026: registration window closes

15 July 2026: UK BNPL regulation takes effect (Regulation Day)

15 January 2027: deadline for full FCA authorisation applications from TPR firms

The capital markets read-across

The UK BNPL market has grown from approximately £60 million in 2017 to more than £13 billion in 2024. DPC receivables are now a meaningful component of UK consumer credit securitisation.

From 15 July 2026, those receivables will originate from FCA-authorised firms subject to the full consumer credit framework, including the Consumer Duty. Conduct issues, particularly around affordability, creditworthiness and Consumer Duty outcomes, move closer to the front of the diligence file. Article 60I RAO arranger exemptions remain available to SPV purchasers, but the substance of what is being purchased changes.

For investors, arrangers and servicers in DPC securitisations, this affects:

  • investor due diligence expectations
  • arranger transaction analysis
  • servicer oversight standards
  • representations and warranties
  • ongoing compliance covenants
  • recordkeeping arrangements

Capital markets participants with BNPL exposure should be reassessing transaction assumptions against the incoming regime.

The temporary permissions regime for unauthorised BNPL lenders

The FCA opens the temporary permissions window on 15 May 2026, to allow unauthorised BNPL lenders to continue operating from 15 July 2026 while preparing their full FCA authorisation application. The window closes on 1 July 2026.

Eligibility for the temporary permissions regime (TPR) is limited. A firm must:

  • have been carrying on DPC activity on or before 15 July 2025
  • notify the FCA before 1 July 2026
  • pay the applicable registration fee

Firms that do not register within the window will need either an existing consumer credit permission, full FCA authorisation by 15 July 2026, or to stop offering BNPL.

What temporary permission requires

Temporary permission is not the finish line. Registered firms have six months from Regulation Day to submit a full application for authorisation. A credible authorisation programme is likely to require:

  • Consumer Duty governance and outcomes monitoring
  • affordability and creditworthiness assessment frameworks
  • financial promotions controls
  • complaints handling processes
  • vulnerable customer policies and operational controls
  • senior management accountability and governance arrangements
  • monitoring, reporting and recordkeeping arrangements

The period between May and July is operationally short. Firms that have not already started preparing may face significant implementation pressure in the second half of 2026, and so may their capital markets counterparties.

How fscom can help

fscom advises capital markets participants, BNPL lenders and consumer credit firms on FCA authorisation, regulatory implementation and ongoing compliance. With six weeks to the registration deadline and another six to Regulation Day, the time to plan is now. If you would like to discuss your firm’s position, get in touch.