What the new Buy Now Pay Later regulations mean for you—and your spending habits

Buy Now Pay Later (BNPL) services have reshaped how Australians shop, becoming increasingly commonplace in Australia over the past several years—but their popularity has come along with concerns about a lack of regulation and oversight in the sector. Now, the way these services operate has changed.

In a move that brings BNPL products under stricter scrutiny, the Australian Securities and Investments Commission (ASIC) has introduced new regulatory guidance to protect consumers and encourage responsible lending. So, what do these changes mean for Australian consumers?

What’s changing in Buy Now, Pay Later (BNPL)?

From 10 June 2025, BNPL products fall under the same laws that apply to credit cards and personal loans, thanks to new rules introduced under the National Consumer Credit Protection Act.

Under these new rules, all BNPL providers will now need to hold an Australian credit licence. This means they’ll be regulated similarly to credit card companies and personal lenders—something that wasn’t previously required.

One of the biggest shifts is the introduction of mandatory credit assessments. If you want to use BNPL to make a purchase of over $2,000, the provider must check that you can actually afford the repayments. For smaller purchases, providers are still expected to gather sufficient information to assess whether the product is suitable for your financial situation.

ASIC Commissioner Alan Kirkland said these reforms are “an important step to improve protection for Australian consumers who use [BNPL] products.” And with research from ASIC showing that one in five BNPL users had cut back on essentials like meals or bills to make repayments, the need for tighter regulation is clear.

Elsa Markula, CEO of Arca—the organisation behind the CreditSmart initiative—says the BNPL reforms are well overdue, but also serve as an important wake-up call.

“Buy Now Pay Later is now Australia’s third most-used form of credit, after credit cards and home loans. Yet many people, particularly younger users, don’t fully realise how it can influence their credit profile,” she explains.

“With these new regulations, how you use BNPL could directly affect your credit score—and your chances of being approved for things like a credit card, personal loan or even a home loan.”

Responsible lending should be “standard practice”, experts say

Canstar’s Data Insights Director, Sally Tindall welcomes the newly applied regulations, saying, “these new rules are designed to stop people from signing up to BNPL services they can’t realistically afford. Responsible lending should be standard practice—not the exception.”

“By capping late fees and admin charges, the changes also help reduce the risk of people racking up high costs on what might have seemed like an interest-free option.”

“Plus, giving all BNPL users access to the Australian Financial Complaints Authority is a real positive. If something goes wrong and you can’t resolve it with your provider, you now have the right to free, independent dispute resolution.”

How the new BNPL regulations could affect you

For everyday users of BNPL, the new rules are likely to bring a few noticeable changes. Firstly, the application process might feel a bit more formal. Where once you could set up a BNPL account in minutes, you may now be asked to provide income details or undergo a credit check—particularly for bigger purchases.

Secondly, missed payments could carry more serious consequences. Because BNPL is now treated more like credit, your repayment behaviour may be reported to credit bureaus. That means late or missed BNPL payments could impact your credit score, making it harder to get approved for things like a car loan or mortgage down the line.

Finally, with these services now subject to responsible lending obligations, you might be declined for BNPL if the provider believes you’re at risk of financial stress. While that might feel like a barrier, it’s ultimately about keeping you from taking on more debt than you can manage.

Tips to keep your BNPL spending in check

With BNPL now under tighter regulation, it’s a good time to review how you’re using it—and whether your spending habits are sustainable. To keep your BNPL spending habits in check, Canstar’s Data Insights Director Sally Tindall has four practical ways to stay in control:

1. Set a clear BNPL budget
   “Before committing to any BNPL purchase, work out how it fits into your overall budget. Just because you don’t have to pay upfront doesn’t mean it’s free money. Map out your repayments and make sure they won’t clash with essentials like rent, bills or savings goals.”
   
2. Monitor your accounts closely
   “It’s easy to lose track of multiple purchases across different platforms. Consider using a budgeting app or setting calendar reminders so you never miss a payment. Staying on top of your due dates helps avoid late fees and protects your credit rating.”
3. Limit how many BNPL services you use
   “While it might be tempting to sign up for several BNPL providers to take advantage of promotions or flexibility, spreading your purchases across too many accounts can make it harder to manage your debt. Try sticking to just one or two platforms that suit your needs.”
4. Check your credit report regularly
   “Now that BNPL can affect your credit score, it’s worth reviewing your report a few times a year. Look for any inaccuracies and make sure all repayments are being recorded correctly. You can access your report for free through providers like Equifax, Experian or illion.”
   

The new BNPL rules aim to make the system safer and fairer, particularly for vulnerable users. While you might notice some extra steps when signing up or making large purchases, the changes are designed to help you stay financially healthy—and avoid the debt traps that unregulated BNPL sometimes have created.

Used wisely, BNPL can still be a handy budgeting tool. But with tighter rules in place, now’s the perfect time to reassess your spending habits and make sure you’re in the driver’s seat.