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The release of a further exposure draft has signalled the government’s ongoing commitment to align BNPL services with other forms of credit, ensuring stronger protections for consumers while supporting the industry’s ability to innovate.
The government has already received substantial feedback from industry representatives, consumer advocacy groups, and regulatory bodies regarding the proposed regulations.
These regulations, which are part of the new BNPL legislation set to come into effect later this year, are expected to bring the sector in line with responsible lending standards.
Assistant Treasurer Stephen Jones said that the reforms aim to strike a balance between safeguarding consumers and enabling the BNPL industry to grow responsibly.
Key provisions in the reforms include:
Strengthened consumer protections: BNPL providers will be required to conduct affordability checks, ensure responsible lending practices, and implement measures to identify vulnerable consumers.
Transparent pricing and disclosure: New rules will demand clearer transparency in fees and charges, giving Australians a better understanding of the true cost of BNPL products. Additionally, the reforms will impose fee caps on BNPL services to protect consumers from excessive costs.
Industry-wide accountability: The regulations aim to create a level playing field by holding BNPL providers to consistent standards. This will give the industry greater certainty, enabling it to invest and innovate within a regulated framework.
The reforms are designed to provide appropriate safeguards while allowing the BNPL sector to continue to evolve in a responsible manner.
The Albanese government has pledged to conduct a review of the regulations two years after they are implemented, using feedback from stakeholders to assess their effectiveness.
Stakeholders are invited to submit their feedback on the draft regulations by 12 February 2025, as the government moves closer to finalising the legislative changes.
The federal government first announced new consumer protection legislation for BNPL products last June.
Minister Jones stated at the time: “The government is working hard to protect consumers against financial harm.
“We want Australians to enjoy the benefits of BNPL, while knowing there are strong consumer protections in place. If it looks and acts like credit, then it should be regulated as such.
“Our changes are balanced and proportionate and maintain the consumer benefits afforded by BNPL products.”
This was backed by members of the broking industry when the proposal was first announced, including MFAA CEO Anja Pannek, who expressed support for the regulations.
[RELATED: Government introduces BNPL consumer protections]
