Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has made an a comparative assessment of the Government's reforms of buy now pay later regulation with similar reforms in other fintech centres.

The Government is working to bring currently unregulated fixed-sum Buy-Now Pay-Later (BNPL) agreements into regulation in a proportionate way. This recognises that, when appropriately used, BNPL products are lower-risk than interest bearing credit products and can be a useful tool for consumers to manage their finances.

The Government’s approach includes tailoring the application of the Consumer Credit Act 1974 to BNPL agreements, to provide appropriate consumer protections without unduly limiting access to these products. In developing this approach, the Government consulted extensively with consumer groups and industry stakeholders to understand the impact of its proposals on consumers and firms.

A further consultation on the draft secondary legislation that will bring BNPL into regulation closed on 11 April. The Government is now carefully considering stakeholder feedback and will publish a consultation response which will set out next steps. The Government will publish an impact assessment ahead of laying any legislation, which will also consider the impacts on consumers of bringing BNPL into regulation.

As part of the policy development process, the Government has engaged with regulators in other comparable jurisdictions to understand how they are approaching the regulation of BNPL.