Q&A: Clearpay on BNPL’s Next Phase of Regulated Growth

Buy Now, Pay Later (BNPL) has quickly become a mainstream payment method, reshaping how consumers manage spending and how retailers drive growth. 

The payment method is entering a new phase of maturity in the UK as long-anticipated regulation comes into force and reshapes how the sector operates. 

The regulation around BNPL is now being brought into line with traditional lending – introducing stricter affordability checks, clearer upfront information and access to formal complaints and compensation processes. 

The changes are designed to strengthen consumer protection and trust at a time where demand for flexible, interest-free payment options is on the rise as BNPL brings together payments, technology and retail – reflecting a broader shift towards more transparent, user-centric financial products.

Clearpay is one of the UK’s leading BNPL providers.

CEO Rich Bayer is leading the company through a pivotal moment for the sector, as adoption accelerates and regulation begins to formalise its role within the wider financial ecosystem. 

With a focus on responsible lending and seamless customer experience, Rich is helping to define how BNPL can scale sustainably while meeting the expectations of modern consumers.

In this Q&A, he shares his perspective on BNPL’s regulatory turning point, the realities behind common misconceptions and how Clearpay is navigating the balance between growth, trust and responsible lending in an increasingly scrutinised market.

What does BNPL regulation actually change for consumers?

We welcome the introduction of regulation because it is an important milestone for the sector that brings greater consistency. 

From 15 July, customers will benefit from clearer information before they take out a BNPL agreement, proportionate affordability and creditworthiness checks, access to the Financial Ombudsman Service if they have a complaint and Section 75 protection for qualifying purchases.

This will strengthen protections which are already in place. For example, at Clearpay, we cap our late fees and pause accounts if a single payment is missed.

Ultimately, these changes are about giving consumers greater confidence. 

They can continue to benefit from the flexibility BNPL offers while knowing there are additional safeguards in place. We welcome the new framework and believe well-designed regulation will help build trust in the sector while maintaining access for people who use BNPL responsibly.

Has BNPL officially gone mainstream? What proves it?

Yes. BNPL has become a mainstream payment choice for millions of UK consumers because it offers a simple way to spread the cost of purchases without paying interest, when used responsibly.

Our latest research found that 39% of consumers have used BNPL, while 25% of those who use BNPL do so because it is cheaper than a credit card or loan. It’s increasingly seen as part of everyday financial management rather than a niche payment option. 

As consumers become more comfortable using digital payment methods, they expect flexible payment choices at checkout and BNPL has become an established part of that mix.

Will tougher rules boost trust or slow growth?

Another reason that we welcome the regulation is that we believe that the new rules will strengthen trust and support the long-term growth of the sector. 

Consumers consistently tell us they welcome regulation because it provides greater protection and confidence.

Our research found that 77% of consumers support BNPL regulation, 61% believe it will provide better protection and nearly half (48%) say the ability to complain to an independent body would make them more confident about using BNPL. 

Importantly, two-thirds (66%) are not concerned that regulation will reduce access.

Responsible innovation and effective regulation are not mutually exclusive. 

We believe clear, proportionate rules create a stronger foundation for sustainable growth by giving consumers greater confidence while ensuring providers continue to offer products that meet customers’ needs responsibly.

Can BNPL regulation become a model for wider fintech regulation?

I believe that BNPL regulation demonstrates that it is possible for government, regulators and industry bodies to work together to deliver proportionate regulation that benefits consumers, the sector and the wider UK economy.

Throughout the process, the Government and the FCA worked closely with industry and understood the need to properly balance consumer protection with sector innovation. 

As part of this, we shared our data on how BNPL can serve customers and how existing safeguards could be strengthened most effectively. 

In turn, we spoke to consumer groups about what vulnerable consumers needed from the new rules. 

The way that people spend and save their money today is vastly different from 10, even five years ago, which the growing popularity of BNPL has proven. 

The outcome of the BNPL regulation process has shown that government and regulators are able to create regulations which are future-proof and take into account the fact that consumer finance trends and the fintech industry are ever evolving. 

If they are implemented properly, they could provide a global example as to what modern fintech regulations should look like.

What’s the biggest misconception about BNPL today?

BNPL continues to be misunderstood as a spending accelerator which encourages people to buy more than they can afford. 

However, our research has consistently demonstrated that the majority of consumers responsibly use it as a tool to spread the cost of payments.

Our new data has shown that 53% of those who use it do so to spread the costs of payments and 35% use it to help manage their budget. 

This is further evidenced by the fact that, at Clearpay, 96% of instalments globally are paid on time, while 90% of instalments are paid using a debit card, demonstrating that people are using money that they already have to make payments.

Where does BNPL fit into the future of UK fintech?

I would argue that BNPL has provided a blueprint of how a financial services product can evolve from being a fintech disruptor to a mainstream tool used by millions, in a way that retains the core aspect of the products that consumers value. 

In BNPL’s case, this is its flexibility, and its ability to offer customers a way to spread costs without occurring additional high interest rates.

Moving forwards, BNPL regulation has helped to drive the conversation around modernising the UK’s Consumer Credit Act, which has been in place for more than 50 years. 

Moving away from prescriptive rules to an outcomes-focused approach will create more room for responsible innovation while ensuring high standards of consumer protection. 

This is good news for the wider industry – if the UK continues to demonstrate that it can strike that balance, it will be an attractive place for fintech businesses to invest, innovate and develop the next generation of financial services.