Changes coming for buy now pay later services: what you need to know
If you're one of the millions of Australians who use buy now pay later (BNPL) services, important changes are coming that will give you stronger consumer protections.
Here's what you need to know about the new regulations taking effect from 10 June 2025. What's changing? BNPL services will soon be regulated more like traditional credit products such as credit cards. Previously, BNPL services wer en’t regulated under the National Consumer Credit Act, leaving a gap in consumer protection. But now, under new laws passed in late 2024, all BNPL providers will need to hold an Australian credit licence and comply with consumer protection requirements.
This means your BNPL provider will need to: hold a credit licence or have applied for one by 10 June 2025; be a member of the Australian Financial Complaints Authority (AFCA); follow responsible lending practices; and meet other consumer protection requirements. What does this mean for you? These changes are designed to protect you while maintaining the benefits of BNPL services.
The aim is that you'll have: better protection against becoming trapped by unaffordable lending; access to proper dispute resolution through AFCA; clearer processes for handling financial hardship; and more consistent consumer protections across all credit products.
The new framework recognises that BNPL services are generally lower-risk than traditional credit products. Most BNPL arrangements will be regulated as “low cost credit contracts”, with modified requirements that balance consumer protection with the unique features of BNPL services.
How can you check if your provider is licensed? From 10 June 2025, you can verify if your BNPL provider is properly licensed using the Australian Securities and Investments Commission’s (ASIC's) Professional Registers Search.
This free online tool will let you search by the provider's name or licence number to confirm: their licence status; what services they're authorised to provide; any conditions that have been placed on their licence; and their business address and other key details. What's happening behind the scenes? BNPL providers are already preparing for these changes. They must submit their licence applications well before the June deadline – ASIC recommends by 11 May 2025 – to ensure they can continue operating.
Providers who don't meet these requirements won't be able to legally offer BNPL services after 10 June 2025.
Why do these changes matter? BNPL transactions now account for about $19 billion annually in Australia, or roughly 2% of all card purchases.
While BNPL services offer convenient payment options and support thousands of local jobs, these new regulations are designed to help prevent debt spirals and ensure you have proper protections when using these popular payment methods.
Need more information? If you're concerned about your BNPL arrangements or want to know more about these changes, you can:
contact your BNPL provider directly;
visit ASIC's Moneysmart website for financial guidance;
and after 10 June 2025, check your provider's licence status through ASIC's Professional Registers Search.
These reforms aim to strike a balance between protecting consumers and maintaining the innovation and competition that BNPL services bring to the credit market. Stay informed about these changes to make the most of your BNPL services while keeping your finances healthy.