Australia's modern, digitally-enabled economy leads the world in innovation, and consumer protections need to keep pace.
That's why the Albanese Government is today progressing our consultation process for regulating Buy Now, Pay Later (BNPL) products.
While the industry's Code of Practice has worked well to date, the sector is maturing rapidly.
Active BNPL accounts grew from 5 million to 7 million last financial year.
Most accounts are held by consumers aged between 18 and 34.
These products deliver real benefits to the vast majority of these consumers.
But there is a regulatory gap that can leave some vulnerable groups in over their head.
Today's paper outlines three options to close the regulation gap:
- Option One: Stronger industry self-regulation plus a new "affordability test" requirement;
- Option Two: Partly bringing BNPL into the Credit Act, including licensing providers and a sliding "unsuitability test";
- Option Three: Completely bringing BNPL into the Credit Act in line with credit cards and other traditional credit products.
The government encourages anyone with views about these options to make a submission through the Treasury consultation process.
The options paper is available on the Treasury website.
