From 10 June 2025, anyone engaging in credit activities involving buy now later contracts must hold an Australian credit licence (credit licence) with all appropriate authorisations.

If you do not have a credit licence and intend to engage, or continue engaging, in credit activities involving buy now pay later contracts from 10 June 2025, you must have, by that date:

• applied for, and have ASIC accept for lodgement, a credit licence or variation that includes the appropriate authorisations in the approved form, and
• become a member of the Australian Financial Complaints Authority (AFCA).

The transitional arrangements allow for the continued provision of buy now pay later contracts where a provider has applied for a credit licence (and had their application accepted for lodgement). This means that you can engage, or continue to engage, in credit activities involving buy now pay later contracts until ASIC determines your licence application, by either granting or refusing to grant the credit licence (or variation).

You can also engage, or continue to engage, in these credit activities on behalf of a provider who has applied for a credit licence (an applicant) if you have their written authorisation to do so and provided the applicant intends to validly authorise you as a representative if they obtain a credit licence. These arrangements will continue for you until ASIC determines the applicant’s licence application.

If you already have a credit licence, any authorisation you have to engage in credit activities in relation to credit contracts will also apply to buy now pay later contracts. You will only need to apply for a variation if you intend to engage in new credit activities. For example, if you have an authorisation to provide credit assistance for credit contracts and intend to become a credit provider of buy now pay later contracts, you will need to apply for a variation to include an authorisation as a credit provider.

Note: Under the BNPL Act, the buy now pay later reforms commence six months after the Act receives Royal Assent, or a date within the six-month period that is fixed by proclamation. The dates indicated in this information sheet assume that there will be no date fixed by proclamation (i.e. that there will be a full six-month transition period).

A buy now pay later contract is a contract between a consumer and a credit provider that is part of a buy now pay later arrangement. A buy now pay later arrangement is an arrangement where:

• a merchant supplies goods or services to a consumer
• a third party (a buy now pay later provider) directly or indirectly pays the merchant some or all of the purchase price, and
• there is a contract between the buy now pay later provider and the consumer, where the buy now pay later provider provides credit to the consumer in connection with the supply of the goods or services.

The requirement under the National Credit Code, that a charge is or may be made for the provision of credit (e.g. interest charges) does not apply to buy now pay later contracts.

The following exclusions under the National Credit Code also do not apply to buy now pay later contracts:

• the exclusion of certain types of short term credit, and
• the exclusion of continuing credit contracts if the only charge that is or may be made for providing the credit is a periodic or a fixed charge (e.g. account keeping fees): see section 13B of the National Credit Code.

The application you submit for a credit licence must be complete. For example, it will need to include certain proofs and attachments such as criminal history and bankruptcy checks for natural person applicants, or in the case of body corporates, for all officers or controllers.

ASIC may reject an application for lodgement if it is incomplete: see section 218(1) of the National Credit Act.

If you lodge your application after 10 June 2025 or if the application is not complete and ASIC does not accept it for lodgement by that date, you will not have the benefit of the transitional arrangements (and may be engaging in unlicensed conduct) unless you submit a further and complete application before 10 June 2025.

If ASIC accepts the lodgement of your licence application, we will assess the information you have provided and decide whether or not to grant you a credit licence.

During our assessment of your application, we may request further details or information from you. While ASIC seeks to assess all licensing applications in a timely manner, how long we take will depend on the quality of your application, whether we have any other questions and the timeliness of your responses.

For information on how to apply for an Australian credit licence, see Apply for a credit licence.

The recent amendments introduce ‘low cost credit contracts’ as a new category of regulated credit under the National Credit Code. Some obligations will differ for buy now pay later contracts that meet the definition of a low cost credit contracts.

For example, providers of low cost credit contracts will be able to elect to comply with modified responsible lending obligations. These will come into effect on 10 June 2025. ASIC will release regulatory guidance on the modified responsible lending obligations and other new obligations for low cost credit contracts closer to this date.

Where a buy now pay later contract does not meet the definition of a low cost credit contract, it will not have the benefit of these different obligations and will instead be regulated under the National Credit Code in the same way as other credit contracts.

A contract is a low cost credit contract if it satisfies the definition of a buy now pay later contract, and:

• the contract satisfies any requirements prescribed by the regulations, including those that relate to fees or charges payable under the contract, and
• the period during which credit is, or may be, provided under the contract is no longer than the period (if any) prescribed by the regulations: see section 13E of the National Credit Code.

In addition to the exclusions under the National Credit Code that do not apply to buy now pay later contracts, exclusions made under section 6(13), 6(14) and 6(17) of the National Credit Code also do not apply to low cost credit contracts: see section 13C of the National Credit Code.

For more information on how to apply for an Australian credit licence, see:

• Apply for a credit licence
• Regulatory Guide 204 Applying for and varying a credit licence (RG 204)
• Regulatory Guide 205 Credit licensing: General conduct obligations (RG 205)
• Regulatory Guide 206 Credit licensing: Competence and training (RG 206)
• Regulatory Guide 207 Credit licensing: Financial requirements (RG 207)
• Regulatory Guide 210 Compensation and insurance arrangements for credit licensees (RG 210)
• Regulatory Guide 271 Internal dispute resolution (RG 271).