Buy Now Pay Later for Australian Businesses: What the 2025 Reforms Mean and How a Finance Broker Can Help

Buy Now Pay Later (BNPL) has transformed how Australian consumers and businesses access short-term credit. But the regulatory landscape changed fundamentally in 2025, and the implications for businesses that offer, use, or integrate BNPL products are still being absorbed. A qualified finance broker can help businesses navigate the new licensing requirements, assess BNPL as a funding tool, and identify compliant alternatives for working capital needs.

Understanding the New BNPL Regulatory Framework

Until mid-2025, BNPL products operated largely outside the consumer credit regulatory framework. That changed with the passage of the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024, which formally extended the National Consumer Credit Protection Act 2009 (National Credit Act) to BNPL products.

Under the new regime, BNPL products are classified as low-cost credit contracts (LCCCs). Providers must hold an Australian Credit Licence (ACL) with appropriate authorisations and must be members of the Australian Financial Complaints Authority (AFCA). These requirements became effective on 10 June 2025.

The LCCC classification allows providers to comply with a modified version of responsible lending obligations (RLO) rather than the full suite that applies to standard credit products. However, strict fee caps apply: fees must not exceed $200 in the first 12 months and $125 in subsequent years, with specific caps on default fees. Anti-avoidance provisions prevent providers from restructuring fees to circumvent these limits.

What This Means for Businesses

For businesses that accept BNPL payments from customers, the regulatory changes primarily affect your BNPL provider — but you should confirm that any provider you work with holds a current ACL and AFCA membership. Partnering with an unlicensed BNPL provider creates reputational and contractual risk.

For businesses considering BNPL as a funding tool — for example, using BNPL to purchase equipment, inventory, or services — the new framework means you are now dealing with a regulated credit product. Understanding the true cost, fee structure, and obligations is essential before committing.

Key Considerations When Evaluating BNPL for Business Use

BNPL can be an attractive short-term funding option for businesses, particularly for purchases under $2,000 where the fee structure is capped. However, there are several critical factors to evaluate before using BNPL as a business finance tool.

Total Cost of Credit

BNPL products are often marketed as "interest-free," but fees can accumulate quickly. Under the LCCC framework, fees are capped, but late payment fees, account fees, and instalment fees can still add up. A finance broker will calculate the effective annual cost of a BNPL arrangement and compare it against alternative funding options such as a business line of credit, overdraft facility, or equipment finance.

Cash Flow Impact

BNPL splits payments into instalments, which can smooth cash flow for smaller purchases. However, for larger business expenditures, the instalment schedule may not align with your revenue cycle. A finance broker will model the cash flow impact of different repayment structures and identify the option that best matches your business's income timing.

Credit Reporting Implications

Under the new regulatory framework, BNPL providers with ACL status are subject to credit reporting obligations. This means BNPL usage — including missed payments — may now appear on your business credit file. A finance broker will advise on how BNPL usage could affect your credit profile and your ability to access other forms of finance in the future.

Suitability for Business vs Consumer Purposes

The LCCC framework was designed primarily with consumer credit in mind. Many BNPL products are not optimised for business use cases such as bulk inventory purchases, trade credit, or capital expenditure. A finance broker will assess whether BNPL is genuinely the right tool for your specific business need, or whether a purpose-built business finance product would serve you better.

Common Mistakes and Red Flags

Businesses that adopt BNPL without proper financial advice frequently encounter avoidable problems. The most common mistakes include:

• Using BNPL for large capital purchases — BNPL is designed for smaller transactions; for equipment or vehicle finance, purpose-built products like chattel mortgage or finance lease are typically more cost-effective
• Stacking multiple BNPL accounts — using several BNPL products simultaneously can create unmanageable repayment obligations and damage your credit profile
• Ignoring the fee structure — assuming BNPL is "free" without reading the fee schedule; under the LCCC framework, fees are capped but not eliminated
• Partnering with unlicensed providers — accepting BNPL payments from customers via a provider that has not obtained an ACL creates legal and reputational exposure
• Failing to account for BNPL in cash flow forecasts — instalment obligations must be included in your working capital planning
• Missing the dispute resolution pathway — AFCA membership is now mandatory for BNPL providers; if a dispute arises, you have access to external dispute resolution, but you need to know how to use it

Australian Regulatory Context

The BNPL regulatory framework is administered by the Australian Securities and Investments Commission (ASIC), which is the primary regulator for consumer credit in Australia. ASIC has published Information Sheet 285 (INFO 285) to guide BNPL providers through the licensing process and outline their ongoing obligations.

The Australian Financial Complaints Authority (AFCA) provides external dispute resolution for consumers and small businesses who have complaints about BNPL providers. AFCA membership is now a mandatory condition of holding an ACL for BNPL activities, giving borrowers a clear pathway to resolve disputes without going to court.

Finance brokers who arrange credit on behalf of clients — including BNPL products — must hold their own ACL or operate as a credit representative of an ACL holder. The National Credit Act requires brokers to act in the best interests of their clients and to recommend credit products that are not unsuitable for the client's circumstances.

ASIC has signalled ongoing surveillance of the BNPL sector in 2026, with a focus on responsible lending compliance, fee transparency, and the treatment of consumers in financial hardship. Businesses and consumers should expect continued regulatory activity as the new framework beds down.

BNPL and Business Finance Checklist

Use this checklist when evaluating BNPL as a business finance option or when reviewing your existing BNPL arrangements:

• Verify provider licensing — confirm your BNPL provider holds a current ACL and AFCA membership via ASIC Connect and the AFCA member register
• Calculate total cost — add up all fees (account fees, instalment fees, late fees) to determine the true cost of the BNPL arrangement
• Compare alternatives — ask a finance broker to compare BNPL against a business line of credit, overdraft, or trade finance facility
• Model cash flow impact — map instalment due dates against your expected revenue to confirm the repayment schedule is manageable
• Check credit reporting implications — understand whether your BNPL usage will appear on your business credit file
• Review dispute resolution rights — confirm you know how to access AFCA if a dispute arises with your BNPL provider
• Assess suitability for purpose — confirm BNPL is the right product for your specific purchase, not just the most convenient option at point of sale

Questions to Ask a Finance Broker About BNPL

A qualified finance broker can provide objective guidance on BNPL and alternative funding options. Ask these questions when engaging a broker:

• Do you hold an Australian Credit Licence, and does it cover BNPL and consumer credit products?
• How do you compare BNPL against other short-term business finance options for my specific purchase?
• What is the effective annual cost of the BNPL arrangement I am considering?
• How will using BNPL affect my business credit profile and future borrowing capacity?
• Are there purpose-built business finance products that would be more cost-effective for my needs?
• How do you ensure the BNPL provider you recommend is fully licensed under the new ASIC framework?

How MyMoney® Can Help

Navigating the post-2025 BNPL regulatory landscape — and finding the right business finance solution — is exactly the kind of challenge a qualified finance broker is equipped to solve. MyMoney® connects Australian businesses with licensed finance brokers who understand the full spectrum of short-term and working capital finance options, including BNPL, debtor finance, trade finance, and business lines of credit.

You can Post a Brief on MyMoney® to describe your business's funding needs and receive competitive proposals from experienced finance brokers. Alternatively, Browse Finance Brokers to review profiles, ACL details, and client reviews before making contact.

With BNPL now a regulated credit product and ASIC surveillance increasing, getting independent broker advice before committing to any BNPL arrangement is a sound business decision. A qualified finance broker will ensure you choose the right product, at the right cost, from a fully licensed provider.