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BNPL (Buy Now Pay Later)

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Definition: Short-term interest-free credit that splits a purchase into instalments. Providers include Klarna, Clearpay and PayPal.

BNPL has historically been outside FCA regulation, but the government has confirmed full regulation is coming. The FCA's Consumer Duty already applies in practice. Missed payments can be reported to credit reference agencies and affect future borrowing.

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