Clearpay CEO: I welcome buy now pay later regulations
New FCA rules for buy now, pay later will strengthen, and legitimise, our industry, writes Clearpay CEO Rich Bayer
Britain is on the verge of a major shift in how people access and use credit. This week, the Financial Conduct Authority (FCA) confirmed its final rules on buy now, pay later (BNPL) regulation, a landmark moment for the sector. We’ve long called for fit-for-purpose regulation which will ensure consumer protection, whilst providing much-needed innovation in consumer credit and supporting the UK’s thriving fintech sector.
While there are significant protections already in place, BNPL has often been misunderstood as encouraging overspending and leading people to take on debt they cannot afford. But the reality is quite different. For many households, it has become a flexible financial tool to help them manage their spending.
Last year, one in five (21 per cent) customers told us they used BNPL specifically to manage their personal finances. That is not reckless borrowing – it is careful money management, supported by interest-free instalments that allow people to spread the cost of essentials without the risk of sliding into revolving debt. This is reinforced by the fact that globally, 96 per cent of Clearpay instalments are paid on time.
No longer a niche product, nearly six in 10 customers told us they hold a positive view of non-traditional credit options, like BNPL. They describe them as accessible, empowering and innovative – words not often associated with traditional credit cards. This shift reflects a wider demand: people increasingly want financial products that are transparent, fair and designed around their real lives, not around high interest charges.
The most telling insight is how people are using BNPL. Many are choosing it for higher-value, necessary purchases such as furniture, appliances and electronics. These are not impulse buys, but investments for the home. BNPL helps households manage such expenses in a measured, affordable way, smoothing the bumps in family budgets without the sting of compounding interest.
Regulation will legitimise buy now pay later
That is why regulation matters. The FCA’s proposals will introduce affordability checks so customers only take on commitments they can reasonably meet. They will require providers to give clear, standardised information so customers know exactly what they are signing up for. Together, these measures mean that BNPL will no longer sit in a grey area – it will be a fully regulated product with protections that are comprehensive, robust and easy to understand.
For customers, regulation will only strengthen the protections already in place. It will guarantee consistency across the sector – ensuring that flexibility comes with clarity, that people can use BNPL with confidence and that there are industry-wide safeguards in place if things go wrong. For businesses, regulation will remove uncertainty, and retailers can confidently integrate BNPL knowing it meets high regulatory standards. In practice, this will help merchants attract and retain customers, while giving shoppers assurance that they are using a product designed in their interests.
This has particular importance for high streets and small businesses. Our research shows that 40 per cent of shoppers would be more likely to support local retailers if they could use BNPL within a regulated framework. At a time when many small businesses continue to face challenging trading conditions, a popular and trusted additional payment option could be a meaningful driver of footfall and loyalty.
With regulation in place, BNPL providers can continue to deliver on their original promise of giving customers flexibility and control in managing their spending. Meanwhile policymakers can help sustain the vibrancy of British retail and strengthen the community connections it provides, while also signposting to the wider fintech industry that the UK supports innovation.
But ultimately, this milestone moment comes down to one thing: BNPL is, and always has been, an inclusive, consumer-centric and forward-looking solution that is transparent and firmly aligned to the best interests of consumers and businesses alike. Completely the opposite to outdated, traditional credit, which has had a hold on consumers for more than 50 years – these days are now numbered.
Rich Bayer is the CEO of Clearpay at Block, Inc