HM Treasury has signed off a targeted fix to the UK’s Buy Now Pay Later rules. The Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) (No. 2) Order 2025 was made on 3 November, laid before Parliament on 4 November, and comes into force on 3 December 2025. It sits alongside the earlier 2025 Order that brings certain deferred payment credit agreements into regulation, as set out on legislation.gov.uk.

The headline change is simple: credit broking is taken out of BNPL checkout journeys. By amending the Regulated Activities Order, ministers exclude all credit‑broking activities connected with a regulated deferred payment credit agreement from article 36A. In practice, a retailer offering BNPL at the point of sale will not need an FCA credit‑broking permission for that activity; responsibility rests with the lender underwriting the instalment plan.

For retailers, that means cleaner authorisation planning without changing the customer experience. A fashion brand selling a £150 basket over three interest‑free instalments can present BNPL options and pass the customer to a lender without holding credit‑broking permissions. You will still need clear, consistent pricing and fair messaging, and your BNPL partner is likely to require tighter approval of checkout wording and marketing materials to satisfy their own regulatory obligations.

For BNPL lenders and fintechs, the perimeter is now clearer. You remain inside article 60B as regulated credit providers, with all the usual FCA expectations around affordability checks, disclosures and handling of missed payments. We expect lenders to strengthen distribution agreements, data‑sharing terms and monitoring of unregulated merchant partners so that customer outcomes stay within the regulator’s expectations.

The Order also tidies the transition to the new regime. If a firm holds a Part 4A permission for article 60B (regulated credit agreements) or article 64 (agreeing to carry on a regulated activity) immediately before the regulatory commencement date, that permission will be treated as permission to carry on the activity as amended. The regulatory commencement date remains 15 July 2026, leaving just over seven months from 3 December 2025 to complete permission mapping and contractual updates.

There are technical fixes too. References to article 36A are removed from definitions of “relevant activity”, and the temporary permission provisions are adjusted so that permissions can cover either or both of the specified activities. The FCA’s ability to vary or cancel permissions is expressly preserved, which means supervisors retain full flexibility through the transition.

Consumers should not expect a dramatic shift this year. The carve‑out affects who needs an FCA permission, not whether BNPL appears at the till. The bigger change arrives on 15 July 2026 when deferred payment credit becomes regulated credit in full, bringing clearer disclosures and stronger conduct standards under FCA oversight.

For SMEs, this is a budgeting call as much as a policy shift. Retailers can redirect compliance spend away from credit‑broking authorisations and into better customer journeys, staff training and lender governance. Fintechs should lock programme plans to the July 2026 switch, with testing of affordability flows and arrears communications scheduled well ahead of summer trading.

The Order applies across the UK and was signed by Lords Commissioners Taiwo Owatemi and Gen Kitchen on 3 November 2025. The Explanatory Note on legislation.gov.uk confirms the policy intent: remove credit‑broking from BNPL journeys and provide a clean transition path for firms holding existing permissions.

Our read is straightforward. By carving merchants out of credit broking from 3 December 2025, the Treasury reduces duplication and puts accountability where it belongs-on lenders writing BNPL credit. Retailers should confirm their provider’s authorisation status and refresh agreements now, while lenders firm up oversight and readiness for the 15 July 2026 regime start. We’ll keep an eye out for any FCA guidance that rounds out the detail.