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Two years after announcing United Kingdom lawmakers would regulate buy now, pay later services, HM Treasury, the British government’s financial arm, has begun its consultation process.
As reported in The Guardian, the process will take eight weeks and will outline the rules that BNPL providers will have to follow. Klarna AB, Clearpay (what Block Inc.’s Afterpay is known as in Europe and the United Kingdom), and Laybuy are popular U.K. BNPL services, The Guardian says. Actual regulations may not be in place until 2024, it reports.
BNPL regulation is nothing new as the U.S. Consumer Financial Protection Bureau has been paying close attention to BNPL services since its Dec. 2021 series of orders sent to five companies to collect information on their practices. Not quite a year later, the CFPB issued a report that suggested a regulatory outline, but no sweeping overhaul.
Concerns about consumers becoming overextended on BNPL loans, and the lack of recourse should a BNPL transaction go awry, mirror similar issues in the United States.
One report, however, issued by Capterra in December, found that 95% of consumers were confident in their ability to make their next BNPL payment on time.
Though BNPL providers Affirm Inc., Afterpay, Klarna AB, Sezzle, and PayPal are among the most well-known, Apple Inc. is poised to offer Apple Pay Later soon, having announced the BNPL service last year.
