Asic warns BNPL players of new regulations

(Source: Bigstock)

The Australian Securities and Investments Commission (Asic) has warned of stricter requirements for providers of buy now, pay later (BNPL) services when new regulations are implemented later this year.

Starting June 10, businesses will need to hold a licence that authorises them to act as a credit provider in order to provide customers with BNPL contracts.

To meet the new requirements, BNPL providers must apply for the credit licence, have Asic accept the application for lodgement, and become a member of the Australian Financial Complaints Authority (AFCA).

Those already having an appropriate Australian credit licence or other variations can continue to provide the service with the transitional arrangements.

Asic advised BNPL providers to act early to apply for or vary a credit licence as the process will take some time.

Providers who do not have their application accepted for lodgement by Asic by June 10 may be engaging in unlicensed conduct if they continue to operate, the regulator stressed.

The new regulations come after the Treasury Laws Amendment Act 2024 amends the National Consumer Credit Protection Act 2009 to extend a modified form of the National Credit Code to BNPL contracts.

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