Buy Now, Pay Later rule change starts Wednesday July 15 for all shoppe | Personal Finance | Finance

Millions of shoppers are expected to use Buy Now, Pay Later (BNPL) services during the summer sales, with more payment options now appearing at almost every stage of the online checkout process. But a major rule change arriving on July 15, 2026, could create an important divide between purchases made before and after that date.

Citizens Advice explains: “With BNPL it’s easy to buy what you want and not realise how much you’re spending. From 15 July, they’ll be regulated by the FCA, so you’ll have greater protection. They’ll have to check you can afford to repay and point you to free debt advice if needed.”

From July 15, BNPL providers will need Financial Conduct Authority (FCA) authorisation, and new consumer protections will apply to agreements entered into on or after that date. This includes clearer information about repayment schedules, missed-payment consequences, and customer rights.

The catch is that agreements entered into before July 15 will generally not automatically receive those new protections. Financial experts say many shoppers may mistakenly assume that all their existing BNPL purchases are covered by the updated rules.

The FCA says: “When you shop online or in store, some businesses offer customers a Buy Now Pay Later option for their items. There are currently 2 types of Buy Now Pay Later; one which we already regulate, and another known as Deferred Payment Credit (DPC).

“DPC is an interest-free form of credit, repayable in 12 or fewer instalments, over 12 months or less. Right now, DPC agreements aren’t regulated, which means lenders don’t need to be authorised by us or follow our rules. But from 15 July 2026, this will change.”

Thomas Drury, money saving specialist at The Investors Centre, says the change is good news for consumers overall. However, he warns that understanding when an agreement was taken out could become just as important as understanding how much was borrowed.

Why does the BNPL July 15 date matter?

BNPL has grown rapidly over the past few years, allowing shoppers to spread the cost of purchases over several instalments without paying interest if repayments are made on time. While its convenience has made it increasingly popular, concerns have also grown about how lightly regulated the sector has been compared with other forms of borrowing.

From July 15, new BNPL agreements will come under FCA regulation. It will mean providers are required to give customers clearer information before they commit to borrowing.

Thomas said: “This is one of the biggest changes we’ve seen for BNPL since these products became mainstream. The new rules should make it much easier for shoppers to understand exactly what they’re agreeing to, when payments are due and what happens if they miss one.

“​The important thing to remember, though, is that these protections aren’t simply being applied to every existing agreement overnight. If you bought something using BNPL before July 15, you shouldn’t automatically assume those new safeguards apply to that purchase. The date you entered into the agreement really matters.”

Why don’t the new rules remove the risks?

Although the reforms introduce greater oversight, Thomas warns they should not be seen as making BNPL risk-free. He said: “The new rules don’t make BNPL risk-free. They make it more regulated. You’re still borrowing money, and that means you still need to think carefully about whether you can comfortably afford every repayment.

“One of the reasons BNPL has become so popular is that the repayments often look small. Paying £25 every few weeks feels very different psychologically from paying £100 in one go, even though you’re spending exactly the same amount. That can make it easier to underestimate how much you’re actually committing to.”

He added that the biggest financial problems often arise when people have several agreements running at once. He said: “One purchase rarely causes difficulties on its own. It’s when someone has five or six different repayment plans leaving their account throughout the month that things become much harder to keep track of. People can quickly lose sight of their total monthly commitments.”

Why existing purchases deserve another look

The July rule change could also create confusion for shoppers who regularly use BNPL. They may end up with agreements that fall under different sets of rules depending on when they were taken out.

“Someone could have one purchase made on July 10 and another on July 20 through exactly the same provider. On the surface, they’ll look very similar, but the regulatory protections behind those agreements may not be identical,” Thomas said.

“That’s why I’d encourage people to spend a few minutes reviewing what they already have outstanding before taking on any new borrowing. Knowing when your repayments leave your account, how much remains to be paid and which agreements were taken out before the rule change can help avoid surprises later.”

Summer spending can make small repayments add up

The timing of the reforms also coincides with one of the busiest shopping periods of the year, as many households spend more on holidays, home improvements, children’s activities and summer sales. Thomas believes this makes it even more important for consumers to think beyond the size of each individual instalment.

He said: “Summer is one of those periods where spending naturally increases, and that’s exactly when BNPL can become more tempting. A few small repayments might seem manageable individually, but together they can put real pressure on your budget if you’ve underestimated how much is leaving your account each month.

“The best approach is to treat BNPL exactly as you would any other form of borrowing. Before agreeing to it, ask yourself whether you’d still feel comfortable making every repayment if an unexpected bill arrived next month. The stronger regulation is good news for consumers, but it doesn’t replace careful budgeting.

“The best protection you’ll ever have is understanding exactly what you’ve signed up for before you click ‘Pay Later’.”