Australia’s Buy Now Pay Later (BNPL) industry will soon be subject to the same rules and regulations as other credit providers, including requirements to perform hard credit checks on new borrowers.
The National Consumer Credit Protection Act - which aims to promote consumer protection, responsible lending practices, and transparency in the credit industry - will be amended to include BNPL companies as credit providers.
“BNPL looks like credit, it acts like credit, it carries the risks of credit,” Assistant Treasurer Stephen Jones told attendees at the Responsible Lending & Borrowing Summit earlier this week.
Under the revised Act, all BNPL providers will need to obtain an Australian Credit Licence. They’ll also be required to enhance their practices with regards to dispute resolution, hardship assistance, product disclosure, and marketing.
These legislative changes are expected to be introduced to Parliament sometime later this year.