New BNPL Checks Could Shut Out 3 Million Shoppers

As many as 3 million UK shoppers could now find themselves locked out of a popular payment option — including many who have never missed a payment.

New regulations on Buy Now, Pay Later, which took effect July 15, mean that prospective BNPL users will have to pass affordability checks to better suss out if they will be able to repay.

Fair4All Finance estimates that up to 30% of the UK’s estimated 11 million BNPL users could be rejected, including regular customers who have never missed a payment.

The new rules from the Financial Conduct Authority could prevent shoppers with thin credit files, low incomes, or bad credit from using BNPL services if they are unable to pass affordability checks.

“Our recent research found that nearly half of those likely to be rejected have not missed a BNPL payment, so there’s a real risk that many people who currently use BNPL responsibly could be unfairly excluded,” said Kate Pender, Chief Executive Officer of Fair4All Finance.

New BNPL Regulations in the UK

In addition to affordability checks, the new BNPL regulations give UK consumers the same refund rights as other forms of credit such as credit cards. And the rules direct BNPL providers to route troubled borrowers to debt advice and support rather than sending accounts directly to a debt collector.

Rachel Blake, Economic Secretary to the Treasury said “it is not fair that people using these products have had fewer rights than if they had paid by credit card.”

“These new rules protect the consumer — with proper checks before credit is offered, real rights when things go wrong, and support rather than pressure if someone falls into financial difficulty,” Blake continued.

UK money expert Martin Lewis personally advocated for the changes, pointing out that many BNPL shoppers are racking up debt.

“They fall for BNPL’s ubiquity, use it constantly and build up a bank of unaffordable debt,” said Lewis, founder of consumer finance site MoneySavingExpert. “Worse, not everyone knows it’s a debt. That is why it has been unsafe for some, and why I was one of those who campaigned strongly for the government to bring in this regulation.”

BNPL Regulations in the United States

The U.S. continues to take a fragmented approach to BNPL regulation. That federal gap widened when the Consumer Financial Protection Bureau withdrew its 2024 interpretive rule on May 12, 2025.

States instead have led the charge as New York, Illinois, and California have pursued their own protections for example.

U.S. states New York, Illinois, and California offer BNPL protections.

In February, Governor Kathy Hochul proposed rules affecting BNPL financing in New York. The proposed regulations would prohibit convenience charges, limit late fees and other types of penalty fees, and protect consumer data from misuse.

On June 25, Illinois Gov. J.B. Pritzker signed a law requiring covered BNPL providers to be licensed, limiting interest rates to 36%, and giving regulators authority over some fees. Providers have been given until Jan. 1, 2028, to be in compliance of this new rule.

California treats BNPL services as loans and requires BNPL providers to hold a state lending license, disclose terms and fees, and face state regulatory enforcement on violations.

“Many Buy Now Pay Later users have subprime credit scores and high debt loads making BNPL loans risky, so it is critical that states step up to fill the gaps in consumer protections,” said Lauren Saunders, Associate Director and Director of Federal Advocacy at National Consumer Law Center.