Buy Now Pay Later Products Subject to Stronger Regulation

Buy Now Pay Later (BNPL) services such as Afterpay and Klarna will now be subject to increased regulation in Australia, in a move designed to enhance consumer protections in Australia.  

Following the passing of the Treasury Laws Amendment (Responsible for Buy Now Pay Later and Other Measures) Act 2024, the National Credit Code has been extended to buy now pay later contracts (BNPL). The new laws, effective from 10 June 2025, require BNPL providers to hold a credit licence to operate. 

To meet the new licensing requirements, BNPL providers who do not have a credit licence must:  

• Apply for a credit licence.  

• Have ASIC accept the application for lodgement.  

• Become a member of the Australian Financial Complaints Authority (AFCA). 

Existing providers with a credit licence may need to apply for a variation if their licence does not cover BNPL activities. 

ASIC has advised BNPL providers to apply early, as the process can take time, particularly due to requirements like criminal history checks.