Proposed regulatory reform in buy now pay later industry

Proposed regulatory reform in buy now pay later industry

DLA Piper has assisted FinTech Australia to prepare a submission on the Australian Government's draft legislation relating to the buy now pay later (BNPL) industry.

The Australian Government has released draft legislation, which proposes to amend the National Consumer Credit Protection Act 2009 (Cth) and the National Consumer Credit Protection Regulations 2010 (Cth), with the effect that BNPL will be subject to the existing regulatory framework for other credit products. Dylan Burke, Corporate Partner, led the team at DLA Piper on this exercise.

"It's critical the regulatory landscape encourages and allows the Australian fintech sector to remain globally competitive and innovative," said Nick Kavass, Head of Policy, FinTech Australia.

"We support a regulatory framework which is flexible, adaptable and proportionate to consumer risk," Nick added.

The peak industry body for the Australian fintech sector – FinTech Australia – represents over 420 fintech organisations nationally. Its vision is to make Australia one of the world's leading markets for fintech innovation and investment. FinTech Australia is actively involved in policy reform, and its submission on BNPL regulatory reform is the latest in a long list of other consultation processes it has participated in.

Dylan Burke, Corporate Partner, DLA Piper, said BNPL providers need regulatory certainty, so they can continue to flourish in the sector.

"Australia's fintech sector has been a global leader in innovation, so it's important the regulatory framework doesn't stifle this momentum – but at the same time, we recognise that some legislative provisions that currently regulate BNPL providers are dealing with products and services that were not necessarily envisaged at the time those legislative provisions were introduced," Dylan added.

As such, it is critical for voices from the BNPL industry to be taken into consideration in formulating the next wave of regulatory reform in this regard.

DLA Piper and FinTech Australia will continue to engage with the Australian Government as the new regulatory framework develops.