The Buy Now Pay Later (BNPL) industry will be subject to new laws starting in June, prompting the Australian Securities and Investments Commission (ASIC) to open a consultation process for affected parties.

The new regulations will require BNPL providers to secure a credit licence and comply with the National Consumer Credit Protection Act 2009.

Specific obligations will also apply when a BNPL contract satisfies the definition of a low-cost credit contract.

“The new laws are designed to maintain the benefits of buy now pay later contracts while boosting protection for Australian consumers,” said Asic.

The draft Regulatory Guide 000, Low Cost Credit Contracts (Draft RG 000) and Consultation Paper 382, Low Cost Credit Contracts (CP 382) for industry and relevant stakeholders are open for feedback now. Feedback can be emailed to: rri.consultation@asic.gov.au with the subject line ‘Feedback on CP 382’ by 5pm AEDT, March 7.

The government regulator earlier said that providers who do not have their application accepted for lodgement by June 10 may be engaging in unlicensed conduct if they continue to operate.