What BNPL regulation means for retailers and how to prepare for July 2026
Key takeaways
- For many consumer brands, it helps drive conversion, increase basket sizes and offer customers greater flexibility.
- Until recently, DPC remained largely unregulated in the UK.
- For retailers, the challenge is not simply understanding the new rules but managing what comes next: balancing additional friction in the customer journey with continued customer demand for flexible ways to pay.
What BNPL regulation means for retailers and how to prepare for July 2026 What BNPL regulation means for retailers and how to prepare for July 2026 · Retail Banker International Global Data Wed, July 1, 2026 at 10:23 PM GMT+7 4 min read Deferred Payment Credit (DPC), commonly known as Buy Now Pay Later, has become a familiar part of the retail checkout experience. For many consumer brands, it helps drive conversion, increase basket sizes and offer customers greater flexibility. But from 15 July 2026, the introduction of FCA regulation will change how these products are offered, creating new challenges and opportunities for both lenders and retailers.Over the past few years, DPC has grown more popular for UK consumers looking to spread the cost of purchases and manage their monthly budgets. According to the Financial Conduct Authority (FCA) Financial Lives 2024 Survey, one in five adults (10.9 million) bought goods using DPC in the 12 months to May 2024, up from 17% (8.8 million) in 2022.
Until recently, DPC remained largely unregulated in the UK. As a result, consumers did not benefit from some of the protections associated with other regulated retail finance products, including affordability checks and access to independent dispute resolution. The new rules will introduce stricter affordability checks around how DPC is offered. In practice, this could mean fewer shoppers being approved, more steps at checkout, and a shift in how – and how often – people choose to use it.
For retailers, the challenge is not simply understanding the new rules but managing what comes next: balancing additional friction in the customer journey with continued customer demand for flexible ways to pay.