In the face of alarming new debt statistics, regulatory and consumer pressures have mounted on Buy Now Pay Later (BNPL) providers to accelerate the implementation of comprehensive affordability checking capabilities.
A growing debt crisis
Recent data has revealed a crisis demanding urgent intervention from the BNPL industry.
Debt counselling service Money Wellness reports that it has helped 44% more people with BNPL debts in the year ending in September 2025 compared to the previous 12 months, which it describes as a "huge spike". Likewise, Citizens Advice has witnessed a 48% year-on-year increase. Most worryingly of all, many consumers are accumulating thousands of pounds worth of debt across multiple providers, highlighting a stark lack of visibility.
This all supports data released by the FCA in the summer in support of its commitment to increase scrutiny and implement compliance requirements. The regulator reported that the frequency of unregulated BNPL use is increasing, with 1.9 million adults using it 10 or more times in 12 months. Further, approximately 1.1 million UK adults have £500 or more outstanding unregulated BNPL debt.
BNPL providers offer vital support for consumers, providing access to affordable credit and a convenient way to spread payments for goods and services. However, as with all types of credit, there is a crucial need to manage the risks and potential harm. Hence, the introduction of new BNPL affordability regulation.
The July 2026 compliance deadline is fast approaching
The clock is ticking. BNPL providers have just a few short months to implement robust affordability check capabilities before the FCA regulation takes effect on 15th July 2026.
The FCA proposes applying tailored Consumer Credit Sourcebook (CONC) rules to BNPL providers, to ensure consumer protection and responsible lending. Under the terms of the new proposals, providers will be required to, amongst other things, conduct proportionate creditworthiness assessments for applications for Deferred Payment Credit (DPC), even for small amounts of £50 or less.
This includes:
- Transaction-level assessments: Every purchase will require a creditworthiness check, regardless of amount.
- Automated systems compliance: Any automation or innovative technology must be tested to ensure responsible lending decisions
- Governance frameworks: Adequate systems and controls must be in place and suitable for DPC lending
- Consumer protection alerts: Custom filtering based on risk appetite to identify vulnerable customers
nCino Identity Solutions Affordability Checks are purpose-built and tested to support responsible BNPL lending
With the compliance deadline looming, now is not the time for BNPL providers to be bolting on quick-fix solutions or attempting to build their own affordability assessment tools from scratch, which could lead to unnecessary compliance difficulties and operational friction.
They don’t need to.
nCino Identity Solutions’ affordability checks address the full spectrum of regulatory requirements while protecting both BNPL later providers and their customers.
With nCino Identity Solutions, BNPL providers can integrate, via a single API endpoint, all the affordability capabilities they need to build a full picture of DPC applicant risk. Thereby protecting customers from debt spirals, whilst maintaining the seamless journey that makes BNPL attractive and demonstrating responsible lending.
Capabilities include:
- Public records integration: Automated insights on bankruptcy, CCJ, IVA, HCJ, AO, and DRO.
- Vulnerable consumer intelligence: Information on 2.5 million (44%) of the UK's most financially vulnerable consumers using high-cost, short-term loan enquiry data.
- Postcode-level analysis: Public and demographic data categorised into derogatory data, lifestyle classifications, and vulnerability markers.
- Mortality verification: Details on 12 million deceased individuals (85% of UK deaths) to detect potential fraud.
- Default likelihood scoring: Public data-derived characteristics using electoral roll, CCJ, and postcode statistics.
- Residential profiling: Insights into consumer circumstances, property type, rental history, and associated data.
BNPL providers that fail to implement tested and compliance affordability checking capabilities by the July 2026 deadline face the prospect of regulatory investigation and penalties, financial and reputational damage, loss of consumer trust, and reduced market share.
6 things BNPL operators should do right now to stay ahead of regulation
- Evaluate current capabilities against the new proposed requirements and understand implementation timelines
- Audit current affordability checking systems and processes
- Secure senior management buy-in for new creditworthiness policies, procedures and investments
- Begin evaluating technology partners – they’re not all built equally
- Speak to nCino Identity Solutions
nCino Identity Solutions' mission is to transform the financial services industry through innovation, reputation and speed. BNPL Affordability checks are a great example of how we build innovative solutions to real problems.
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