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What New FCA Rules Mean for Deferred Payment Providers
Reprinted from: Law360 | 03/26/2026Cadwalader partner Alix Prentice examines the Financial Conduct Authority's final rules (PS26/1) regulating deferred payment credit, popular "buy now, pay later" products repayable interest-free over 12 months or less, which take effect July 15, 2026.
Providers must obtain FCA authorization (or enter the temporary permissions regime opening May 15) and comply with consumer credit rules including pre-sale product disclosures, creditworthiness assessments even for loans under £50 and consumer duty requirements for fair value and good outcomes throughout the customer journey.
Alix notes these changes, while front-loaded with compliance costs, should enhance asset quality through mandated credit checks, improve consumer transparency and provide market-wide data through regulatory reporting, potentially paving the way for the first public DPC-backed securitizations. "Regulation is not just a reaction to critical mass...it brings positive benefits," she writes, including better credit quality and informed consumer choices.
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