Buy now pay later (BNPL) credit agreements are to be brought under regulation by the Financial Conduct Authority (FCA), the Government has announced.
Such products, which allow shoppers to spread purchase costs interest-free at the checkouts, are rapidly increasing in popularity, it said.
The volume of transactions tripled in 2020 as the coronavirus pandemic drove online shopping and there is now a significant risk that these agreements could cause harm to consumers, it added.
By announcing plans to legislate to bring interest-free buy now pay later products into regulation, the Government said it is acting swiftly to ensure people can continue to benefit from the products with the right protections.
The announcement comes as a review of the unsecured credit market, led by Christopher Woolard, recommended bringing interest-free buy now pay later into FCA supervision.
