Australian government set to regulate BNPL industry

The Australian government has announced that it will be regulating the buy now, pay later (BNPL) industry, treating BNPL as credit products.

The decision was announced by Australian financial services minister Stephen Jones in a speech at the Responsible Borrowing and Lending Summit held this week in Sydney, Australia.

Jones says the government arrived at the conclusion following an extensive consultation on options to regulate BNPL, which kicked off late last year.

The review raised “significant” concerns in the BNPL industry, including “unacceptable levels” of unaffordable lending, largely concentrated among low‑income borrowers, including those on social security. Additionally, it highlighted concerns about the quality of dispute resolution and hardship processes, excessive fees, poor disclosure practices, problematic marketing practices, and unsolicited credit increases.

As per the government’s plan, BNPL providers will now be regulated under the Credit Act, and will be required to hold Australian credit licences, meet statutory hardship and resolution requirements, and comply with minimum standards of conduct.