The Financial Conduct Authority has announced it will introduce regulations for Buy Now, Pay Later products.
The Government announced the plans on Tuesday to “protect consumers”.
Interest-free “buy now pay later” agreements which allow people to pay by installments will be regulated by the FCA.
This comes as a review found “potential for harm” in the services.
What does this mean?
The Buy Now, Pay Later market has grown as popularity of digital payments increases, with Britons spending £2.6bn via the service over the Christmas 2020 period. New regulations will mean lenders have to carry out affordability checks, and will focus on making sure vulnerable people are treated fairly.