With Buy Now Pay Later (BNPL) now formally within the FCA’s regulatory perimeter, much of the industry’s focus has been on authorisation, affordability assessments and compliance with the new rules. But as the sector moves into a fully regulated environment, the bigger challenge is demonstrating that products, customer journeys and support arrangements deliver good customer outcomes in practice. 

1.Demonstrating good customer outcomes 

The Consumer Duty applies to BNPL providers from day one. Firms will need to show that processes and controls exist – and that they deliver good outcomes in practice. 

This requires ongoing monitoring of customer behaviour, complaints, arrears, vulnerability indicators and customer understanding rather than relying solely on policy documentation or governance frameworks.

2. Balancing seamless journeys with informed decision-making

BNPL has achieved significant growth largely through simple, integrated digital customer journeys. The challenge now is ensuring that convenience does not come at the expense of customer understanding. 

Firms will need to demonstrate that consumers receive appropriate information at the right time and can make informed borrowing decisions before completing transactions.

3. Embedding proportionate affordability assessments

The FCA’s new requirements introduce proportionate affordability checks designed to ensure customers can repay what they borrow. Firms will need to balance customer experience, operational efficiency and regulatory expectations while ensuring affordability assessments remain effective as customer behaviours evolve. 

4. Supporting vulnerable customers

Many firms already have vulnerability frameworks in place. However, BNPL providers should expect greater scrutiny of how vulnerable customers are identified, monitored and supported throughout the customer lifecycle. 

This includes ensuring support arrangements are accessible, effective and tailored to customer needs when financial difficulty emerges.

5. Producing meaningful management information

Boards and senior management will increasingly need evidence that controls are working as intended. 

This means moving beyond operational metrics and developing management information that provides insight into customer understanding, affordability outcomes, complaints, customer support interactions and potential indicators of harm.

6. Preparing for future supervisory scrutiny

As with other recently regulated markets, firms should expect the FCA’s focus to shift from rule implementation to supervisory assessment. 

Firms should clearly evidence their decision-making, customer outcomes and governance oversight, so they are prepared to respond to regulatory enquiries or reviews.