With the US-inspired Black Friday discount day set for 28th November, Cyber Monday on 1st December, and a flurry of festive spending expected in the runup to Christmas, Q4 2025 will be a bumper quarter for Buy-Now-Pay-Later (BNPL) schemes.
Black Friday shoppers, however, have been urged to be prudent when it comes to BNPL offers at checkout, given the record numbers of people struggling to meet their repayment plans. So concerning is this trend that the UK’s Financial Conduct Authority (FCA)
has declared that it will start closely regulating BNPL by mid-2026.
In this instalment of Finextra’s Explainer series, we look at the BNPL craze and unpack some of the systemic risks and recourses.
The scale of BNPL debt
According to a PwC
forecast, UK bargain hunters will spend £6.4 billion on Black Friday this year – up from £6.3 billion in 2024. To spread the costs,
one in three Britons plan to use BNPL schemes, which work by allowing consumers to break purchases down into several instalments, often with no interest attached. In the UK, the most well-known BNPL providers are Klarna, ClearPay and PayPal.
Even outside the inevitable Q4 shopping sprees, BNPL use has been steadily rising. In a press release, UK Finance revealed that BNPL use by UK adults increased from 14%
to 25% between 2023 and 2024. Fashion led the way, comprising 46% of BNPL transactions, with an average spend of £114. And, though younger adults remain the most frequent users, uptake among 55–64-year-olds more than doubled in the same period – rising
from 10% to 21%.
These trends would be palatable were they not accompanied by a sharp increase in the number of consumers seeking help with mounting debt. In the UK, over 3
million customers missed their repayments in 2024. Many incurred charges, damaged credit scores and are being pursued by debt collectors.
A caution from money experts
So widespread is this issue that a clutch of money experts has stepped in ahead of Black Friday and Cyber Monday to caution shoppers. Citizens Advice, which is currently supporting more people than ever with BNPL-related issues, said to The
Guardian:
“We urge people to take caution, especially if they are struggling with bills already.”
Money Wellness, an organisation that offers free money and debt advice, has also weighed in, underlining that October was a record
month for people seeking help with BNPL debt. More consumers are expected to slip into hot water by Q1 2026, as festive repayments and higher heating bills begin to bite.
The regulatory response
Going forward, the BNPL space will be shaped by regulation. As of 15 July 2026, the FCA will start regulating the service – encouraging affordability checks on even the smallest loans, to encourage more responsible lending and limit unaffordable debt. This
move was well received by the UK government, which has for many years been wrangling to introduce rules that clamp down on what it describes as the 'wild west'
of BNPL schemes.
Supporting the intent of the FCA in Europe is
Directive 2023/2225 (CCD2), which entered into force in November 2023, and introduced a comprehensive revision of the EU framework governing consumer credit. Among its provisions are stricter creditworthiness checks, greater levels of transparency, and
a concerted effort to encompass credit types that were somewhat under-regulated before – like BNPL and other micro-loans.
Across the pond, similar actions have been taken, and BNPL debt is being
added to credit scores.
A Black Friday to remember
Thanks to the efforts of the FCA, Black Friday and Cyber Monday 2025 mark the last discount days of their kind unaccompanied by consumer protections. In the UK, BNPL loans will become regulated credit agreements from 15 July 2026. Clearly, 2026 is shaping
up to be a transformative time for short-term loan services.