Buy now, pay later (BNPL) providers are being guided through new legal obligations with the release of Regulatory Guide 281 (RG 281) by the Australian Securities and Investments Commission (ASIC), ahead of major reforms taking effect on June 10, 2025.
The new guide, Low Cost Credit Contracts, outlines how BNPL and low-cost credit providers can comply with key requirements, including modified responsible lending obligations.
“These reforms are an important step to improve protection for Australian consumers who use buy now pay later products,” said ASIC Commissioner Alan Kirkland.
In the past years, the BNPL industry has grown significantly and rising competition in the sector may offer consumers more choices and better deals.
However, the growing number of providers also brings potential hidden risks like overcommitment, missed payments, and overspending.
After releasing a draft version of the guide and Consultation Paper 382 in February, ASIC received 16 submissions from stakeholders including BNPL providers, industry groups, and consumer advocates.
In response, ASIC revised the final version of the guide, offering clearer explanations and practical examples.
“Providers who do not have their credit licence application accepted for lodgement by ASIC by 10 June 2025 may be engaging in unlicensed conduct if they continue to operate,” said Kirkland.
The Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 amends the National Consumer Credit Protection Act 2009, extending the National Credit Code to BNPL contracts.
Under the new regime, buy now pay later providers whose contracts meet the definition of a low-cost credit contract will face different obligations.
Last January, ASIC released Information Sheet 285 to clarify licensing requirements for credit activities involving BNPL products.