UK proposes regulation for buy now, pay later firms like Klarna and Affirm

From CNBC: 2025-05-19 07:27:00

Klarna popularizes “buy now, pay later” trend. U.K. government proposes regulation for short-term loans amid concerns of BNPL sector’s impact on affordability. Fintech firms like Klarna, Afterpay, and Affirm compete in the interest-free financing space. New rules aim to protect consumers, ensure repayments, and establish a complaint resolution process.

City Minister Emma Reynolds introduces U.K. proposals to regulate BNPL firms, requiring upfront checks and easier refund access. Consumers can escalate complaints to the Financial Ombudsman. Regulation anticipated for next year to provide clarity, consistency, and sustainability to the growing BNPL market.

Klarna and Clearpay express support for BNPL regulation, emphasizing the need for clarity, consistency, and compliance standards. Concerns exist about outdated rules affecting business models. Government aims to modernize the Consumer Credit Act to create a pro-growth framework reflecting current borrowing practices. Affirm CEO discusses industry developments in a CNBC interview.

Read more: UK to regulate buy now, pay later firms like Klarna and Affirm