On 16 June 2025, HM Treasury (HMT) issued an update on domestic premises suppliers and buy-now, pay-later (BNPL).

Background

In its consultation on the BNPL regime HMT proposed that domestic premises suppliers – businesses who sell, offer to sell or agree to sell goods or offer to supply or contract to supply services in people’s homes – would be required to seek credit broking permissions to offer BNPL products as a payment option. Shortly before it was due to issue its response to its consultation, HMT became aware of concerns that this approach may risk consumer choice on small sum transactions.

Because these concerns were raised at a late stage, it was not possible to reach a final view on the regulatory approach without delaying the regulatory regime, and therefore the government issued its consultation response and draft legislation in line with the approach to domestic premises suppliers outlined in its consultation and committed to continue to work with industry and the FCA to consider its approach to these types of merchants.

Update

HMT now states that the government has concluded that domestic premises suppliers offering BNPL as a payment option present a low risk to consumers and the approach set out in the original draft statutory instrument is considered to be disproportionate. To address this, the government intends to lay an amending negative statutory instrument to remove the requirement for domestic premises suppliers to have credit broking permissions to offer BNPL products. This negative statutory instrument is expected to be in place to coincide with the regulation of BNPL.

HMT adds that key protections for consumers will remain, including:

  • BNPL lenders will be required to perform affordability and creditworthiness checks before a consumer can use the product.
  • BNPL users will be able to address poor service through section 75 of the Consumer Credit Act and raise complaints through the Financial Ombudsman Service.
  • When authorised by the Financial Conduct Authority, BNPL lenders will be expected to comply with the FCA’s Consumer Duty rules, which state that firms should regularly monitor and review consumer outcomes. Under the Consumer Duty, BNPL firms will also be expected to have a greater oversight of the firms using their services – including digital payment solutions merchants.