BNPL Is Now Regulated In Australia To Stop People From Debt

In an effort to stop people from getting into more debt, the Australian government is going to make new rules that will treat “buy now, pay later” plans as credit goods.

Unveiling the reforms, Assistant Treasurer Stephen Jones, says: “Evidence suggests that those risks are disproportionately affecting women, First Nations communities and people on low incomes. We have heard that some people are opening multiple BNPL accounts, to access far more debt than they’d be able to get on a credit card or a payday loan.”

The new rules will also help fix other problems, such as high fees, poor disclosure, bad marketing, and credit raises that were not asked for.

As a result of the reforms, BNPL providers will have to get Australian credit licences, follow the rules for responsible lending, meet the legal requirements for dispute resolution and hardship, meet the legal requirements for product disclosure and other information, and follow the rules about marketing that is not acceptable.

Fintech Australia, a business group, liked the ideas.

“Measured regulation is crucial in ensuring trust in Australia’s fintech industry, which is essential for its growth,” says general manager Rehan D’Almeida. “This framework strikes a balance, designing a scalable and technology-neutral framework that embeds strong and effective consumer protections.”