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Announced in May, the BNPL reforms mean the service is now regulated like any other credit product.
The added scrutiny means low-cost credit lenders must make additional inquiries and implement stricter policies when assessing borrowers.
ASIC commissioner Alan Kirkland said the changes are in the name of protecting consumers.
“These reforms are an important step to improve protection for Australian consumers who use buy now pay later products,” Kirkland said.
The changes also mean BNPL may affect the credit scores of borrowers. If payments are missed, it could make it harder for people to take out loans.
Home Loan Experts mortgage broker Ajar Rajbhandari said borrowers must be more cautious when accessing BNPL services.
“I think it’s good for us. Many people tend not to include BNPL when they are declaring their financial position. If it appears in the credit reports, though, we can identify these things in advance and work out solutions accordingly,” he said.
“If they have late payments, maybe we can work out lenders that can accommodate that. From clients’ perspective though, they have to be more careful with these things and treat them more seriously.
“They have to understand that these things can impact the credit file and eligibility for good loan deals now, as the information directly hits their overall client character profiling with the credit reports.”
Rajbhandari hopes BNPL will see further scrutiny and wishes to see lenders educate borrowers on the credit score implications of these services.
“Usually, by the time clients come to us, it is too late. We can find options still, but they could miss out on the better options available,” he said.
“The BNPL providers need to educate consumers on these things when they are offering these services.”
Today is also the first day that BNPL providers need to have a credit licence. ASIC urged these lenders to keep on top of regulations.
“We strongly encourage buy now pay later providers who do not already have the appropriate credit licence to apply for one as soon as possible,” Kirkland said.
“Providers who do not have their credit licence application accepted for lodgement by ASIC by 10 June 2025 may be engaging in unlicensed conduct if they continue to operate.”
[Related: ASIC reveals BNPL reform modifications]
