FinanceDublin.com - The Dillon Eustace Regulatory Quarterly Update: Regulation to extend to the ‘Buy Now, Pay Later’ sector

Keith Waine, partner in Dillon Eustace’s Financial Regulation Unit, reviews the draft legislation that looks set to bring the fast-growing, and largely unregulated, ‘buy now, pay later’ services segment under Irish financial regulation. Currently many of the services provided by BNPL players such as Sweden’s Klarna, Italy’s Scalapay, and US’ Affirm, (primarily interest-free deferred payments) fall outside the definition of ‘credit’ set out in the Central Bank Act 1997 but new legislation is set to change this and make such services providers subject to a range of new business requirements, he says.

With the pandemic accelerating the shift to online shopping and digital financial services, the use of ‘buy now, pay later’ services (BNPL) has seen rapid growth. The sector is widely predicted to continue to grow quickly in the years ahead and leading players, including Klarna, Scalapay and Humm, are either already established in Ireland or are planning operations here. Internationally, there has been a flurry of big deals in the sector with payments giants Paypal, Square and Stri....

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