BNPL Regulation in the UK: What Shopify Merchants Must Change at Checkout

BNPL regulation in the UK began on 15 July 2026, when the Financial Conduct Authority started regulating Buy Now Pay Later as "deferred payment credit". Around 11 million people use these products, and lending has grown from £0.06bn in 2017 to more than £13bn in 2024.

The rules apply to BNPL lenders, not to the retailers who offer them at checkout. But in practice, every UK Shopify merchant offering Klarna, Clearpay, PayPal Pay in 3 or Shop Pay Installments will feel the change, because lenders are asking merchants to carry new wording through checkout, emails and receipts.

This article explains what the FCA rules require, how they reach your store, and how to stay compliant without hurting conversion.

What changed on 15 July 2026?

The FCA published its final rules in PS26/1 on 11 February 2026, after a consultation in 2025. From 15 July 2026, lenders offering interest-free BNPL to finance purchases from a merchant are regulated.

The FCA's press release sets out the main protections:

• Affordability checks. Lenders must run proportionate checks before lending. As the FCA puts it, "no one should be lent to if they're unable to repay."
• Clear information. Customers must get upfront details of payment dates, amounts and the consequences of missing a payment.
• Consumer Duty. BNPL now falls under the FCA's Consumer Duty.
• Support and complaints. Lenders must help customers in financial difficulty, and customers can complain to the Financial Ombudsman Service.

Who needed authorisation?

Lenders could register for a temporary permissions regime between 15 May and 1 July 2026, then have six months to apply for full authorisation. Merchants offering their own credit directly ("merchant own credit") remain exempt, a decision the government made in 2024.

Why does this matter for Shopify merchants?

You are not regulated by the FCA for BNPL, but your checkout is where the customer meets the lender. Lewis Silkin's guidance for businesses offering BNPL highlights several practical effects:

• Lenders will require merchants to show mandatory information in ecommerce, app and in-store journeys.
• Lenders may ask for specific wording in confirmation pages, order emails and receipts, including how to complain to the lender and then the Ombudsman.
• Creditworthiness rules may add data collection or decision screens at checkout.
• Merchants remain subject to consumer law, so the combined journey must be fair, clear and not misleading.

There is also a conversion risk. Required disclosures can clutter mobile checkouts, and lender wording can feel off-brand. Lewis Silkin suggests challenging wording that is too long, too risk-heavy or inconsistent with consumer law.

How big is BNPL in the UK?

The FCA's figures show why regulators acted:

For many UK fashion, beauty and home brands, BNPL is a meaningful share of online payments. The aim of the rules is to make it more sustainable, not to remove it.

Where does Shop Pay Installments fit?

Shopify now has its own BNPL option in the UK. The Paypers reported in December 2025 that Shopify and Affirm launched Shop Pay Installments for UK merchants, after early access began in October 2025. Affirm underwrites every transaction and makes a real-time credit decision, and plans can be interest-free or interest-bearing. UK merchants can enable it from the Shopify admin.

One early UK user, Abbott Lyon, reported a 20% higher average order value than other payment methods, according to the same report. That is a single merchant's experience, so test it against your own data.

Shop Pay itself is growing fast. Digital Commerce 360's analysis of Shopify's Q2 2026 results shows Shop Pay GMV up 53% year on year.

Choosing your BNPL mix

What about refunds, returns and customer service?

BNPL regulation does not stop at the payment step. Lewis Silkin notes that lenders must now send post-contract and missed-payment notices, and may require merchants to hand customers over to the right support route. That has knock-on effects for your operations:

• Refunds need to be fast and accurate. When a customer returns an item bought on BNPL, the lender adjusts the instalments. Slow refunds can leave a customer facing a payment for goods they have sent back, which is exactly the harm the rules aim to prevent.
• Customer service scripts need updating. Staff should know which questions belong with the lender, such as payment schedules and missed payments, and how customers can complain.
• Disputes need a clear path. Customers can now escalate unresolved complaints about the lender to the Financial Ombudsman Service, so make sure your team can point them to the lender's complaints process.

For Shopify stores, this is mostly about returns workflows and help centre content, both of which can be updated quickly.

What should UK merchants do now?

Small stores using one BNPL provider

1. Ask your provider for its regulation documentation: required wording, where it must appear and any technical changes.
2. Check your checkout, order confirmation email and returns emails show the required information.
3. Make sure on-site BNPL messages, such as "pay in 3", are accurate and not misleading.

Growing brands with several providers

1. Map every place BNPL appears: product pages, cart, checkout, emails, SMS and customer service scripts.
2. A/B test placement of required wording to protect mobile conversion.
3. Compare providers on approval rates, fees and disclosure burden, and consider consolidating.

Brands with physical stores

1. Check how affordability checks work at the till, which is often the most complex journey.
2. Train store staff on new information and complaint routes.
3. Align online and in-store wording so customers get one consistent message.

As BNPL sits within financial services rules, it is worth asking your legal adviser to review the final customer journey.

Conclusion

The FCA's BNPL rules are aimed at lenders, but they land in the merchant's checkout. As of October 2026, UK Shopify stores should already have updated wording in place, and those that have not should ask their providers for the required disclosures straight away.

Handled well, regulation can make BNPL a more trusted payment option, and Shop Pay Installments gives UK merchants a native alternative to compare. If you need help reworking checkout, emails or payment set-up, ONEXT's Shopify development team can support you as a trusted implementation partner.