Regulations have changed for buy now pay later services

If you're one of the millions of Australians who use buy now pay later (BNPL) services, important changes are now in effect that will give you stronger consumer protections. Here's what you need to know about the new law and regulations that apply from 10 June 2025.

What's changed?

Under law changes that were passed in late 2024 and now apply, BNPL services are being regulated more like traditional credit products such as credit cards. Previously, BNPL services weren’t regulated under the National Consumer Credit Act, leaving a gap in consumer protection. But now, all BNPL providers need to hold an Australian credit licence and comply with consumer protection requirements.

This means your BNPL provider needs to:

• hold a credit licence (or have applied for one by 10 June 2025);
• be a member of the Australian Financial Complaints Authority (AFCA);
• follow responsible lending practices; and
• meet other consumer protection requirements.

What does this mean for you?

These changes are designed to protect you while maintaining the benefits of BNPL services. The aim is that you'll have: 

• better protection against becoming trapped by unaffordable lending;
• access to proper dispute resolution through AFCA;
• clearer processes for handling financial hardship; and 
• more consistent consumer protections across all credit products.

The new framework recognises that BNPL services are generally lower-risk than traditional credit products. Most BNPL arrangements will be regulated as “low cost credit contracts”, with modified requirements that balance consumer protection with the unique features of BNPL services.

Providers must meet responsible lending obligations when agreeing to a BNPL contract or credit limit increase for you, which generally includes seeking and verifying certain information about your financial situation and assessing whether their offering’s unsuitable based on that information. You can ask your BNPL provider to see the assessment they make about your credit contract or limit increase; they must provide you with a free, written copy on request.

How can you check if your provider is licensed?

Now that the changes apply, you can verify if your BNPL provider is properly licensed using the Australian Securities and Investments Commission’s (ASIC's) Professional Registers Search.
This free online tool lets you search by the provider's name or licence number to confirm:

• their licence status;
• what services they're authorised to provide;
• any conditions that have been placed on their licence; and
• their business address and other key details.

Why do these changes matter?

BNPL transactions now account for about $19 billion annually in Australia, or roughly 2% of all card purchases. While BNPL services offer convenient payment options and support thousands of local jobs, these new regulations are designed to help prevent debt spirals and ensure you have proper protections when using these popular payment methods.

Need more information?

If you're concerned about your BNPL arrangements or want to know more about these changes, you can:

• contact your BNPL provider directly;
• visit ASIC's Moneysmart website for financial guidance; and
• check your provider's licence status through ASIC's Professional Registers Search.

These reforms aim to strike a balance between protecting consumers and maintaining the innovation and competition that BNPL services bring to the credit market. Stay informed about these changes to make the most of your BNPL services while keeping your finances healthy.

Source: Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024
Media Release - ASIC releases new regulatory guidance to support buy now pay later industry reforms
afca - Supporting Buy Now Pay Later reforms (2025)