The Australian Securities and Investments Commission (ASIC) said buy now pay later (BNPL) providers must apply for a credit licence under new laws aimed at enhancing consumer protection.
ASIC: Buy Now Pay Later Providers Must Apply For a Credit Licence
The Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024, which received royal assent on 10 December 2024, extends the National Credit Code to BNPL contracts.
ASIC explained that from 10 June 2025, BNPL providers will need to hold a credit licence authorising them to engage in credit activities as credit providers.
They added that transitional arrangements will allow providers who have submitted their licence application and had it accepted to continue operating.
ASIC said providers without a credit licence should apply early, as obtaining necessary documentation, such as criminal history checks, can be time-consuming.
To benefit from transitional arrangements, applications must be lodged by 11 May 2025 and accepted by 10 June 2025.
“Providers who do not have their application accepted for lodgement by ASIC by 10 June 2025 may be engaging in unlicensed conduct if they continue to operate,” said ASIC.
Furthermore, they said providers already holding a credit licence for credit activities must ensure it authorises them for BNPL contracts or apply for a variation.
ASIC concluded that under the new regime, some obligations will differ for buy now pay later contracts that meet the definition of a low-cost credit contract.
“For example, providers of low-cost credit contracts will be able to elect to comply with modified responsible lending obligations,” they stated.
