Treasury set to delay plans to regulate BNPL sector

The government is reportedly delaying plans to regulate the ‘buy now, pay later’ (BNPL) sector in the UK.

It was announced earlier this year that the rapidly growing, and largely unregulated, BNPL space was going to come under a new set of rules from the Financial Conduct Authority (FCA).

Two years after first announcing BNPL would come under FCA governance, and a long consultation period later, the government released a consultation document outlining draft legislation in February.

Now, according to reports from Sky News, these plans have been tabled due to worries it could make low-interest products less available to consumers during a cost-of-living crisis.

Treasury officials have reportedly been told that some of the big names in the industry could leave the UK market if “heavy-handed” regulation is put in place.

The regulation would crucially grant customers the right to take their complaints to the Financial Ombudsman Service, among other protections.

According to the government, more than 10 million people in the UK could be protected against unregulated lending with the introduction of new rules.

While delaying the regulation, or even changing the way in it is introduced, does not mean scrapping of new rules altogether, it does continue to leave consumers vulnerable.

“One option is to look at this as part of work to update the Consumer Credit Act, which the Treasury announced last year,” an insider told Sky News.