BNPL to be part of credit regulation overhaul

  • By Zilla Efrat

The government would soon start consultations on how to improve the regulation of credit, including buy now pay later (BNPL) products, Stephen Jones, Assistant Treasurer and Minister for Financial Services, said on Tuesday.

Speaking at Responsible Lending and Borrowing Summit in Sydney, he said it shouldn’t be controversial to classify BNPL as a credit product.

“If it walks like a duck and quacks like a duck, it’s a duck,” he said.

“So, let’s have an end to the silly argument about whether BNPL is credit and get on with the next stage of growth for this emerging industry.”

Jones noted that BNPL products were unique, and any future regulatory framework needed to reflect that. “Which is why we will take a careful and deliberate approach that balances the need to protect consumers with encouraging innovation in our financial services industry.”

He added that BNPL played an important role in providing low cost and convenient credit to consumers. “However, we must be mindful of the risks that may arise from innovation and ensure our regulatory frameworks remain fit for purpose in light of evolving technologies and business practices.”

Jones said the new government was carefully monitoring how other jurisdictions approached regulation of the BNPL sector. This included the United Kingdom, which has also announced its intention to regulate BNPL as credit products, in a tailored way.