Due to the regulations, BNPL enterprises will need to verify that borrowers can afford loan repayments before granting a loan.
In order for customers to comprehend the dangers of missing a payment, businesses must also make it apparent that the arrangement is a debt.
According to the Treasury, the measures would undergo a consultation process before the legislation is laid in early 2025 and goes into effect in 2026.
Because BNPL products let customers spread out the expense of purchases over time, they have grown in popularity in recent years.
More regulation has long been demanded by activists like Money Saving Expert Martin Lewis.
Mr. Lewis praised the news, stating that Chancellor Rachel Reeves personally called him to share the information.
He said in a post on X that since BNPL is now common at online checkouts, it is absurd that it has never been controlled, something that I and others have long advocated for.
