The regulatory response to Buy Now Pay Later in Australia

The Buy Now Pay Later (BNPL) industry has seen considerable growth over the last 15 years and, from 10 June 2025, BNPL products will be regulated as credit products. This article considers the likely effectiveness of the proposed regulation which will require BNPL providers to comply with responsible lending obligations, and notes the important role that the regulator, the Australian Securities and Investments Commission, will play in monitoring and guiding BNPL providers’ responses to responsible lending obligations to avoid harm to consumers. Because BNPL is regarded as ‘low risk’ in most circumstances, there is the possibility that providers will be able to avoid effective regulation.