How will buy now, pay later regulation affect consumers?

In June, the government announced that buy now, pay later platforms would be brought under the Consumer Credit Act and regulated as a form of credit. This was to ensure that users are subject to checks and given the same kind of protections that apply to other credit products.

Elsa Markula, chief executive at the Australian Retail Credit Association, says that the government's decision was a welcome development.

"The regulation of buy now pay later is just about adding to the clarification that buy now pay later is a form of credit where a form of responsible lending obligations will apply. It also means that we will see other features like credit checks become standard for buy now, pay later products."

So where are we at in terms of regulation actually taking effect? Markula says that the passing of legislation needed to regulate buy now pay later is imminent.

"The legislation was actually listed to go to the Senate this week, but I think consumers can expect to see something come through - probably by the end of the year, and the legislation will take effect six months from then."

Read more: What are the main buy now, pay later apps in 2024?

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