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BNPL and Credit Licensees – beat the rush

Dermott Lynch

On 22 May 2023, the Financial Services Minister, Stephen Jones told the Lending and Borrowing Conference in Sydney that the Government intends to increase regulation on businesses providing buy now, pay later (BNPL) services.

The extent of regulation over BNPL has been the topic of enquiry for over 3-years and, although the details have not yet been released, it is likely that the Government will introduce regulations that will require all businesses providing BNPL services to:

  1. hold an Australian Credit Licence (ACL) under the National Consumer Credit Protection Act 2009 (National Credit Act),

  2. adhere to responsible lending obligations (similar or the same to those prescribed under the National Credit Act),

  3. offer hardship paths for customers (similar or the same to those prescribed under the National Credit Act), and

  4. require the BNPL businesses to meet statutory dispute resolution standards.

These new requirements will inevitably result in an increase in ACL applications, which can take up to 5-months to receive a determination from ASIC, an increase in interest in acquiring businesses that operate under an ACL and authorisations to operate as Credit Representatives.

As the new regulations are likely to be introduced early next year, BNPL service businesses should obtain advice early on as their best option.

Alternatively, if you have a business that operates under an existing ACL and are interested to divest that part of the business, now is the best time to do so while the demand is high.

Russell Kennedy is able to assist BNPL businesses to adapt to the new regulations, guide them through the ACL application process or facilitate the purchase of a company that holds an existing ACL.

How we can help

Please contact Dermot Lynch from Russell Kennedy's Corporate & Commercial Advisory team.

If you’d like to stay up to date with Russell Kennedy Alerts and Events, you can subscribe to our mailing list here.

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