These rules will take effect from 15 July 2026 and cover the previously unregulated Deferred Payment Credit (DPC) products. The changes mark a major shift in regulatory expectations for BNPL providers and will require significant operational, compliance, and customer experience transformation.
For BNPL firms, the next few months will be critical. Compliance and customer service leaders must ensure their organisations are ready for tougher standards around transparency, affordability, dispute resolution, and customer vulnerability.
Here, we outline the key areas of change and share the benefits of our 25 years’ experience in enabling financial services firms to run fully compliant and effective complaints handling operations.
Timelines and Changing Expectations
The FCA have now given a clear timetable for BNPL firms to follow in adopting this new regulation throughout 2026.
- 15 May – 1 July 2026: Temporary Permissions Regime (TPR) - BNPL firms with DPC products must register for the Temporary Permissions Regime during this window to continue operating legally while preparing for full authorisation.
- 15 July 2026: New Protections Come Into Force - Consumer protections including clear information, affordability checks, and access to redress become mandatory.
- Six Months After TPR Commencement: Full Authorisation Applications Due - Once the TPR period begins, firms have six months to submit full authorisation applications.
- From Early 2027: Full Compliance Required - By 2027, the FCA expects all firms to be operating fully in line with FCA rules.
The key requirements for BNPL firms new to regulation, or for those applying existing regulatory obligations to new products, are as follows:
1. Mandatory FCA Authorisation
All lenders offering DPC must obtain full FCA authorisation. This extends supervision, reporting obligations, governance requirements, and Consumer Duty expectations.
2. New “Key Product Information” (KPI) Requirements
The FCA reduced, refined, and clarified what must be proactively disclosed before agreement formation, shifting less critical details (e.g., cancellation rights, FOS info) into “additional product information.”
3. Expanded Conduct Rules & Consumer Duty Application
Firms must meet the Consumer Duty’s consumer understanding and consumer support outcomes, requiring clearer disclosures, evidence of good customer outcomes, and tailored support mechanisms.
4. Creditworthiness & Affordability Checks Become Mandatory
Even small loans (< £50) require creditworthiness assessments and, where applicable, CRA checks.
5. Rules for Missed Payments and Arrears Support
Firms must give prescribed information to customers who miss repayments and tailor communications to their circumstances — including debt advice signposting.
6. Full Complaint Handling Requirements Under DISP
DPC firms must comply with regulated complaints handling rules, including timely investigations, appropriate redress and reporting obligations. In addition, FOS rules also apply and customers can escalate complaints to the Ombudsman for the first time.
7. New Regulatory Reporting Requirements
Firms must submit Product Sales Data (PSD) and other aggregate reporting returns (with transitional arrangements).
What BNPL Firms Need to Do Now: Priority Actions
A. Compliance & Risk Transformation
Build or Improve Affordability Assessment Frameworks by implementing proportionate affordability models aligned to FCA expectations, integrating data sources for creditworthiness checks and establishing monitoring for vulnerable customers.
Overhaul Customer Communications including redesigning pre-contract and checkout disclosures and ensuring explanations of missed-payment consequences are accessible and clear.
Update Policies and Controls to Meet Consumer Duty ensuring all BNPL agreements can evidence good consumer outcomes and fair value.
B. Customer Service & Complaints Readiness
Prepare for FOS-Compliant Complaints Handling by ensuring complaint investigation standards meet DISP rules, implementing systems and processes capable of capturing and reporting complaint MI and training teams on FOS requirements and vulnerability indicators.
Strengthen Financial Difficulty Support Processes including building workflows for proactive and reactive customer support and ensuring seamless referral routes to independent debt advice.
C. Operational & Technical Readiness
Start FCA Authorisation Preparation Immediately. This involved reviewing governance, SMCR roles, IT resilience, and risk frameworks and identifying gaps against FCA permissions and expectations.
Implement End-to-End Journey Testing to validate the customer experience from application through to resolution, and ensuring affordability, disclosure, and complaint processes meet regulatory standards.
How EQ Customer Resolutions Can Support BNPL Firms
The scale of the requirements from the FCA can look daunting for those unfamiliar with regulation. Partners like EQ Customer Resolutions can support BNPL firms every step of the way through this regulatory transformation, bringing deep expertise in complaint handling, vulnerable customer support, and regulated operations.
We have provided regulatory compliance support and operational expertise to financial services firms for over 25 years and have at our disposal a wide variety of solutions to help your firm on your path to full FCA regulation. This includes:
FCA-Ready Complaints Management Expertise including the process, people and technology solutions for designing and operating a fully compliant complaints handling operation. This also features FOS-compliant investigation frameworks and MI dashboards to support regulatory reporting and Consumer Duty outcomes.
Vulnerable Customer & Financial Difficulty Support such as specialist teams trained in FCA vulnerability guidance, tailored support programmes and signposting pathways and integrated escalation routes to debt advice providers.
Authorisation & Compliance Readiness Support, from consultancy services to help firms prepare FCA authorisation applications, to policy, process, and control framework development, and operational reviews to ensure alignment with BNPL regulatory standards.
Customer Communication & Journey Redesign including review and optimisation of pre-contract disclosures, the creation of compliant customer communications and mapping and testing of end to end journeys to ensure they meet fairness and transparency standards.
Conclusion: The Time to Act Is Now
With BNPL regulations coming into effect from July 2026, firms face a compressed timeline to meet significant new obligations. PS26/1 fundamentally transforms BNPL from an unregulated offering into a fully regulated credit product governed by CONC, DISP, Consumer Duty, affordability rules, and FCA reporting obligations.
Compliance and customer service leaders must act quickly to build compliant frameworks, fortify customer support capabilities, and prepare for greater regulatory scrutiny.
EQ Customer Resolutions can help BNPL firms navigate this regulatory shift with confidence—ensuring not only compliance, but the delivery of better, fairer customer outcomes.
We can act as a comprehensive partner in:
- achieving FCA authorisation
- implementing compliant customer journeys
- transforming complaints, arrears, and vulnerability processes
- building reporting and governance frameworks
- ensuring seamless Consumer Duty alignment
