Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has made an estimate of the number of buy-now-pay-later providers that are reporting their customers’ borrowing and repayment records to the credit reference agencies.

HM Treasury regularly monitors the consumer credit market as part of its normal process of policy development.

Buy-Now Pay-Later (BNPL) is an interest-free product which gives consumers a time-limited means of spreading payments for their purchases. When used responsibly and provided affordably it can be a helpful way for consumers to manage their finances and make purchases.

Many consumers are attracted to BNPL because of its interest-free nature, which the Government considers makes it inherently lower risk than most other types of credit. The FCA’s most recent Financial Lives survey found that 46% of people of who had used BNPL in the past 12 months used it because it was interest-free.

As such, BNPL represents a popular alternative to traditional, interest-bearing forms of credit like credit cards and personal loans. For some financially vulnerable consumers it may also provide an alternative to high-cost and illegal lending. According to the FCA’s most recent Financial Lives survey, nearly 9 million adults in the UK have used BNPL in the past 12 months, and the average user had £160 outstanding across their BNPL purchases.

While the department does not hold precise information on the number of BNPL firms reporting information about their customers’ agreements to credit reference agencies, it understands that several of the UK’s major BNPL firms have reporting arrangements in place with at least one credit reference agency.