On 11 February 2026, the Financial Conduct Authority (FCA) issued Policy Statement 26/1: Regulation of Deferred Payment Credit (unregulated Buy Now Pay Later): Feedback to CP25/23 and final rules (PS26/1).

Background

On 14 July 2025, the Government made legislation to bring Deferred Payment Credit (DPC), more commonly known as Buy Now Pay Later, into regulation from 15 July 2026 (Regulation Day). On 18 July 2025, the FCA published Consultation Paper 25/23. This set out the FCA’s proposed approach to regulating DPC. The consultation closed on 26 September 2025.

In PS26/1 the FCA summarises the feedback and its response, alongside its final rules.

Final rules

The FCA reports in PS26/1 that it has broadly made the rules and guidance as consulted on although it has made some minor changes.

In Chapter 2 of PS26/1 the FCA confirms that it is:

  • Applying most of its existing conduct rules and guidance in the Consumer Credit Sourcebook (CONC) to DPC.
  • Making new rules for DPC lenders to provide product information to a borrower before they enter a DPC agreement. The FCA has made some small changes to the rules that it consulted on. In particular, to make sure consumers are given ‘key product information’ that is most important to their decision making.
  • Making new guidance to remind firms of their obligations under the Consumer Duty’s consumer understanding and consumer support outcomes.
  • Making new rules requiring firms to provide information to DPC borrowers who have missed a repayment, and to give notice to the customer before taking certain action. The FCA has made some minor changes to the rules it consulted on. These will require DPC lenders to provide information about free debt advice in certain circumstances. It has also clarified what information firms should provide to consumers who have missed payments.
  • Applying its existing creditworthiness rules to DPC lending, including to agreements of less than £50.

In Chapter 3 of PS26/1 the FCA confirms that it is applying:

  • Key Handbook requirements beyond CONC to DPC lenders.
  • Existing regulatory reporting requirements to DPC lenders, including Product Sales Data (PSD) and aggregate regulatory returns, with transitional provisions for when firms will need to submit PSD returns.

In Chapter 4 of PS26/1 the FCA sets out that it is:

  • Applying the Dispute Resolution: Complaints Sourcebook (DISP) rules on complaint handling to DPC.
  • Expanding the Compulsory Jurisdiction of the Financial Ombudsman to DPC activities.
  • Not expanding the Financial Ombudsman’s Voluntary Jurisdiction to cover DPC activities by a respondent from a European Economic Area or Gibraltar establishment.
  • Suspending its complaints reporting rules for complaints arising from DPC activities for firms while in the Temporary Permissions Regime (TPR).
  • Not extending compensation by the Financial Services Compensation Scheme to DPC activities, in line with most other consumer credit activities.

In Chapter 5 of PS26/1 the FCA confirms how it will authorise firms undertaking DPC activity who do not currently hold the necessary consumer credit permissions and how the TPR will operate.

Next steps

The FCA reports that those firms without the necessary consumer credit permissions that wish to continue DPC lending after Regulation Day must notify it for TPR registration, if eligible. The FCA will open the window for notifications for the TPR on 15 May 2026, 2 months before Regulation Day.

The FCA is already engaging with firms it expects to register for the TPR through its Authorisations pre-application programme. Firms with questions can contact the FCA at deferredpaymentcredit@fca.org.uk, or be routed to the team via its pre-application support service or other wider support services.