Innovate Finance Calls UK Government’s BNPL Plans “Onerous”

Innovate Finance is a trade group for the fintech industry. Its members are “deeply concerned” about the UK government’s plans to control the “buy now, pay later” market. They say the rules would be harder to follow than those for credit cards.

In February, the long-awaited consultation on rules to crack down on the unregulated BNPL market was finally held.

In its answer, Innovate Finance says that all of our members are very worried” and that the latest policy proposals and draft statutory instrument” are a big change from the “tailored and proportionate regime for BNPL that has been talked about a lot.

Continues the body:

“Our members consider that the measures, in aggregate, are more onerous than those that currently apply to regulated consumer credit products with a greater risk of harm such as credit cards.

Specifically, Innovate Finance say that pre- and post-contractual disclosures are unsuited and disproportionate to the nature of the product and “drive poor consumer outcomes”.

Innovate Finance says that these disclosures will cause problems and drive consumers away from BNPL in favor of more expensive options like credit cards at such a rate that it raises doubts about the viability of firms’ UK operations.

The answer also says that the government plans don’t include Big Tech and big stores, which could make the credit market less competitive.

Innovate Finance also says that following the rules will be expensive, saying that there is a range of impacts from no less than £1.25 million to £100 million; this is a conservative estimate based on data points shared by our members.