What you need to know for Buy Now Pay Later Credit Licensing
The buy now pay later (BNPL) sector in Australia is entering a new regulatory era. The Australian Government has confirmed that BNPL will now be captured under the National Consumer Credit Protection Act 2009 (Credit Act) closing the previous regulatory loophole for amounts under $2000. This means that providers must obtain an Australian Credit License (ACL) to continue offering deferred payment products.
Key Dates & Transition Period
- Mid-2025 – ASIC’s consultation and draft regulations expected to be finalized.
- 12-month transition period – Once legislation commences, BNPL providers can continue operating while applying for an ACL.
This shift makes buy now pay later credit licensing a legal necessity not an option.
Why the Change?
BNPL providers were previously exempt under the Credit Act due to technical classifications. However, increasing concern around:
- Consumer debt levels
- Missed payment hardship
- Inadequate dispute handling
…led to legislative reform aimed to:
- Enforce responsible lending obligations
- Introduce product disclosure requirements
- Improve complaint and hardship resolution systems
Who Now Needs an ACL?
Buy now pay later credit licensing applies to all providers offering deferred credit arrangements, including:
- Instalment-based platforms like Afterpay, Zip, Klarna
- Retailers with their own BNPL facilities
- Wallets or digital apps offering delayed payment credit
ASIC’s Expectations
ASIC’s updated framework treats BNPL as a “low-cost credit product”, meaning modified responsible lending obligations will still apply. Providers must:
- Treat customers fairly
- Assess affordability
- Maintain compliant dispute systems
- Join AFCA for external dispute resolution
- Obtain adequate PI insurance
🔍 TIP: Early preparation is key to avoiding compliance delays and reputational risks in buy now pay later credit licensing.
Licensing Options: How to Get BNPL Ready
If you’re entering or already operating in the BNPL market, here are three ways to meet buy now pay later credit licensing requirements:
✅ 1. Apply for Your Own ACL
This is ideal for mid-to-large fintech operators wanting direct control of their BNPL services.
Pros:
- Full regulatory autonomy
- Scalable business model
- Long-term cost savings
Cons:
- Application takes 6–9 months
- Requires detailed documentation
- Ongoing compliance burdens
Application Costs:
- ASIC fee: $3,500–$5,000
- Consultant or law firm costs vary: (see comparison table below)
✅ 2. Become a Credit Representative
This option allows you to operate under another ACL holder’s licence—perfect for new entrants.
Pros:
- Quicker market access
- Reduced setup complexity
Cons:
- Ongoing fees to the licensee
- No legal ownership of licence
✅ 3. Partner With a White-Label BNPL Provider
If your goal is customer acquisition rather than credit service operations, this allows complete outsourcing.
Pros:
- Zero compliance management
- Ideal for retail-focused brands
Cons:
- No control over the credit product design or branding
- Revenue share may reduce profit margins
⚖️ Licensing Expert vs. Law Firm: Which Is Best for Your BNPL License?
Which Is Best for Your BNPL Licence?
| Feature | Licensing Expert (Consultant Approach) | Traditional Law Firm |
|---|---|---|
| Timeframe | 4–6 months | 6–9+ months |
| Pricing Model | Transparent fixed-fee | Hourly rates + application fee |
| Average Total Cost | $9,900 – $15,000 | $10,000–$18,000+ |
| Support After Lodgement | Included in package | Additional hourly billing |
| BNPL-Specific Experience | Yes – fintech templates and tailored docs | General credit templates |
| Client Fit | Startups, BNPL, fintechs, Credit Apps | Larger corporates, banks |
| Technology Familiarity | High (API, automation, wallet integrations) referral sources | Often low |
🔍 For buy now pay later credit licensing, consultants like Licensing Expert offer an agile, cost-effective path to approval without compromising ASIC compliance.
🔄 Ongoing ACL Compliance: What You Must Do Each Year
Once licensed, you must meet annual obligations to keep your ACL in good standing. ASIC expects complete compliance throughout your licence period.
✅ Annual Buy Now Pay Later Credit Licensing Compliance Checklist
| Requirement | Description |
|---|---|
| Annual Compliance Certificate | Lodge via ASIC Connect within 45 days of licence anniversary. |
| AFCA Membership | Must remain current and active. |
| Professional Indemnity Insurance | Ensure coverage meets ASIC’s expectations for credit providers. |
| Credit Guide & Disclosure Docs | Must be current and supplied to all customers. |
| Training & CPD | Responsible Managers and reps must maintain yearly CPD. |
| Compliance Monitoring | Internal compliance reviews must be documented and signed off. |
| Risk Management Strategy | Updated strategy required, reflecting business model and risks. |
| Breach Reporting (RG 78) | Any reportable situation must be disclosed to ASIC within 30 days. |
🔐 Bonus Tip: Use cloud based tools like 6clicks, ComplyFlow, or Jira + Confluence for internal compliance management and workflow tracking for your buy now pay later credit licensing framework.
✅ Final Thoughts
Buy now pay later credit licensing is no longer optional. With ASIC finalizing reforms, all BNPL providers must begin preparing their ACL applications or partner with a compliant licensee. Delays or non-compliance can lead to enforcement action, customer churn, and reputational harm.
At Licensing Expert, we offer tailored pathways, ready-to-lodge documentation, and fixed-fee support to get your BNPL service compliant and ready
💼 Ready to Apply?
Let’s get your buy now pay later credit licensing application underway.
👉 Visit www.licensingexpert.com.au or email us at info@licensingexpert.com.au to book a free strategy call.
