UK Government Plans New Rules For Buy Now, Pay Later Services

Britain plans to regulate buy now, pay later (BNPL) lenders starting next year to provide shoppers with clearer rights and protections, the UK finance ministry announced.

The new rules will require providers such as Klarna and Clearpay to assess whether customers can afford their debt and offer faster refunds. Over 10 million people in the UK use BNPL, which spreads payments for retail products over instalments. While the government sees BNPL as a tool for managing finances when used responsibly, consumer groups have warned that some shoppers accumulate debt through its use for essentials like food and energy bills. The government said consistent standards will help shoppers understand their obligations and access support if needed. The move follows earlier draft plans to regulate the sector.