Through this initiative, the Government extended the application of the National Credit Code (Schedule 1 of the National Credit Act) to BNPL contracts. This results in BNPL contracts being captured by the definition of credit contract under the Code.
According to the official press release, a BNPL contract is between a consumer and a credit provider that is part of a BNPL arrangement. This involves merchants offering goods and services to a consumer, a third party directly or indirectly paying the merchant for some or all the purchase price, and a contract between a BNPL provider and the consumer, where the former supplies credit to the latter in connection with the provision of the goods or services.
As detailed by the regulatory body, as of 10 June 2025, any company conducting credit activities involving BNPL contracts is required to hold an Australian credit licence with all applicable authorisations. If an organisation does not have a credit licence and intends to engage or continue participating in activities involving BNPL contracts from the aforementioned date, they must have applied for, and have ASIC accept for lodgement, a credit licence or variation that includes the authorisations in the approved form, as well as become a member of the Australian Financial Complaints Authority (AFCA).
Additionally, with this transitional arrangement, companies can continue to provide BNPL contracts if they apply for a credit licence and have their application accepted for lodgement. At the same time, organisations can engage or continue to do so in these credit activities on behalf of a provider who has applied for a credit licence if they have their written authorisation and if the applicant aims to validly authorise the company as a representative if they obtain a licence. When it comes to entities already holding a credit licence, any authorisation they have to engage in these activities concerning credit contracts is set to apply to BNPL contracts. They are only required to apply for a variation if they plan to engage in new credit agreements.
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