BNPL's Coming Of Age: Regulation Arrives, But Where Does The Credit Go Next?

To be attributed to Santosh "San" Nakra-Shah, Co-Founder and Managing Partner at ChilliMint Europe Limited

 "From 15 July, Buy Now Pay Later finally has to play by the same rules as the rest of the credit industry, and having watched this market grow up from the sidelines for years, I'd say it's overdue. The affordability checks introduced in the new FCA rules go a long way to making repayment terms clearer, and afford stronger protections for the UK's estimated 11 million BNPL users."

"BNPL was built for the want-not-need purchases - the trainers, the gadget, the £80 dress you talk yourself into. The issue is it's now supporting far more routine spending, like groceries, school uniforms and energy bills. UK households are facing steep rises in the cost of living and estimates suggest around 1.6 million people have used credit, including BNPL, to help cover everyday bills."

"BNPL is frictionless and available exactly when people need it, offering quick access to credit at the point of purchase for consumers who may not qualify for, or choose not to use, more traditional forms of borrowing. It's not hard to see why it took off. But every form of credit gets the seatbelt fitted once enough people are driving too fast in it - store cards went through this in the 2000s, payday lending in the 2010s. BNPL's turn has simply come round."

"What worries me is the unintended effects of these regulations. Fair4All Finance estimates the stricter affordability checks could exclude 10-30% of current users from BNPL altogether. That need for quick, flexible credit doesn't evaporate just because access tightens - it goes looking for a new front door, and people don't always choose a safer one once theirs closes."

"I see stronger regulation as a genuinely positive step, but the debate feels incomplete. Demand for short-term credit won't disappear when BNPL becomes harder to access, so are we solving the problem, or just moving it somewhere less visible? As the market evolves, are we paying enough attention to the consumers who may end up caught in the middle?"

About the author

Santosh "San" Nakra-Shah is the co-founder and Managing Director of ChilliMint, a specialist consultancy and marketing agency focused on payments, fintech, retail banking and financial services.

With more than 25 years of experience across banking, payments and financial services, San is a trusted advisor to payment schemes, banks, fintechs and merchants, helping organisations strengthen their marketing strategy and positioning, engage customers more effectively and bring complex products and propositions to market through clear, compelling marketing and communications strategies.

Before co-founding ChilliMint, San spent 10 years at Barclays in a range of senior roles spanning retail banking, payments, innovation, product development, and customer experience. Her final role was Head of Payments Innovation, where she led the development of new payment propositions and emerging payment technologies. During her time at Barclays, she played a key role in launching several industry-leading initiatives, including text message banking, contactless payments, and prepaid products.

She also led the bank's internal design agency, giving her a unique blend of expertise across product innovation, customer engagement, design and commercial delivery.

About ChilliMint

ChilliMint is a specialist consultancy and marketing agency focused on payments, fintech, retail banking and financial services.

Founded by former banking and payments professionals, the company helps fintechs, banks, merchants and payment providers turn complex products, technologies and industry developments into clear, compelling stories that drive commercial results.

What makes ChilliMint different is the deep understanding of the payments industry. They are fluent across the full payments ecosystem, including card issuing and acquiring, merchant payments, digital wallets, open banking, embedded finance, payment orchestration, fraud and identity, digital commerce, stablecoins and emerging payment technologies. This allows their team to work confidently with product, commercial and leadership teams, creating marketing and thought leadership that is both technically credible and commercially relevant.

With more than 17 years of experience across payments, banking and B2B marketing, they support clients with marketing strategy, proposition development, thought leadership, content creation, customer engagement and campaign delivery. By combining industry expertise, strategic thinking and creative execution, they help organisations strengthen their market position, accelerate growth and communicate with greater clarity and impact.

www.chillimint.com