News – What New BNPL Rules Mean for You:

For years, Buy Now, Pay Later (BNPL) services like Afterpay, Klarna and Zip operated with fewer rules than banks or credit card companies. That changed on 10 June 2025.

As of this date, BNPL providers must now hold an Australian Credit Licence and meet the same obligations as traditional lenders. This marks a major shift in how these services operate and how consumers use them.

Why the Changes?

BNPL services were built on the idea of quick, interest-free instalments with no complex credit checks. The model grew rapidly, especially among younger shoppers and online buyers looking for a flexible way to pay.

But with rapid growth came concerns. Many users found themselves juggling multiple repayment plans, sometimes across several BNPL platforms, often without a clear picture of how much debt they were carrying. The lack of formal regulation made it harder to spot risks early and harder still to resolve disputes.

Regulators like ASIC stepped in following their 8 May 2025 announcement outlining ‘New Regulator Guidance to Support Buy Now Pay Later Industry Reforms’

What’s New Under the Rules?

Here’s a breakdown of the biggest changes BNPL providers must comply with:

• Australian Credit Licence Required: All BNPL operators must now be licensed credit providers just like mortgage brokers, car loan lenders, and credit card issuers. This ensures they meet minimum standards for responsible lending.
• Credit Checks & Affordability Tests: Providers need to assess whether a customer can reasonably afford repayments. For higher-value purchases (typically over $2,000), more thorough assessments may be required. This is aimed at preventing users from taking on debt they can’t manage.
• Complaints Handling & AFCA Access: Consumers now have better access to dispute resolution. BNPL companies must be members of the Australian Financial Complaints Authority (AFCA), offering an external body to turn to if something goes wrong.
• More Transparent Costs: Expect to see clearer information on late fees, repayment terms, and how these products may impact your credit file.

How This Affects Everyday Australians:

If you’ve used BNPL to split payments on retail purchases, you may notice a few more steps in the process, like sharing more financial details or seeing a credit check.

While the convenience factor may take a slight hit, the upside is stronger protections. These rules aim to prevent people from unknowingly falling into a debt spiral, especially when using multiple BNPL services.

There’s also a flow-on effect: missing repayments could now impact your credit score, something that wasn’t standard before. Using BNPL now carries more weight when it comes to managing your financial reputation.

What It Means for the Industry:

BNPL platforms are no longer small players, they’re part of the mainstream finance ecosystem. With that comes responsibility.

This regulatory update forces them to build stronger internal systems, train staff on responsible lending obligations, and potentially rethink how their products are marketed. While it adds complexity, it also boosts credibility. The end result is a safer, more sustainable model that treats BNPL more like any other form of credit.

Final Word:

BNPL has been a disruptor and for good reason. It offered a simpler, often cheaper alternative to credit cards. But with growing use came growing risk, and regulation was overdue.

These changes aren’t about shutting the door on flexible finance. They’re about protecting Australians like yourself while still allowing innovation to thrive.

Before you click “Pay in 4,” take a second to understand what you’re signing up for. Under the new rules, that process will be clearer, more transparent, and safer for everyone.

To learn more head to ASIC to read their ‘Buy Now Pay Later Credit Contracts: Credit Licensing’

Sick of Juggling Payments? Let’s Simplify Things

Contact us today about debt consolidation. We’ll help you roll multiple repayments into one simple, manageable one, cutting through the chaos so you can take control of your money with confidence.