Australia's buy now, pay later industry became subject to the country's consumer credit framework on 10 June 2025, when the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 came into effect. The legislation regulates BNPL products as credit, with most falling into a new category of low-cost credit contracts, bringing Afterpay, a subsidiary of Block Inc, and its competitors within the National Consumer Credit Protection framework for the first time.
Under the new framework, BNPL providers are required to hold an Australian Credit Licence. Providers must also join the Australian Financial Complaints Authority, giving consumers an external dispute resolution mechanism, conduct credit checks on new customers before extending credit, and, to qualify as low-cost credit contracts, keep non-default fees within caps of AUD 200 in the first 12-month fee period and AUD 125 in each later period.
PREVIOUS TREATMENT
By structuring their products as instalment arrangements rather than credit products, providers including Afterpay were able to avoid the licensing, responsible lending, and disclosure requirements that applied to traditional credit cards, personal loans, and other consumer finance products.
The Treasury Laws Amendment Act regulates BNPL products as a form of consumer credit.
AFTERPAY AND SECTOR COMPLIANCE REQUIREMENTS
The company has published guidance for merchants explaining the regulatory changes and their implications for the checkout experience that BNPL products offer to retail and e-commerce customers.
The introduction of the Australian Credit Licence requirement brings BNPL providers into a regulatory environment that includes ongoing reporting obligations to ASIC, requirements for internal dispute resolution processes, and standards for responsible lending conduct.