Buy Now - Pay Later (BNPL) services to be treated as regular consumer credit
So far, the regulation of “Buy Now – Pay Later” (BNPL) services has been relatively lenient under Czech law thanks to an exemption in the Consumer Credit Act. This is about to change significantly. With the transposition of the revised Consumer Credit Directive (CCD2), BNPL will now become fully subject to the consumer credit regime.
The amendment to the Consumer Credit Act, which is due to take effect on 20 November 2026, abolishes the exemption for payment methods where the buyer defers payment until a later date. Under the new rules, all BNPL products in which the credit is provided by a third party (other than the merchant) will fall fully within the scope of the consumer credit legislation. The BNPL providers will be required to assess the creditworthiness of each consumer individually, based on information about their income, expenses and liabilities, as well as data from credit registers. They will also have to provide pre-contractual information, adapt the product to stricter advertising rules, and revise their contractual documentation, including terms on repayment, sanctions, withdrawal from contract and early repayment.
For the BNPL model, which is based on low amounts and near-instant approval within seconds, this represents a fundamental change in the logic of how the product operates.
However, the amendment leaves limited room for merchants to remain outside the scope of the Consumer Credit Act: for a deferred payment not to fall under the consumer credit regulation, the following conditions must be met:
- the merchant, not a third party, acts as the creditor,
- the payment is deferred free of charge (with no interest or fees whatsoever),
- the deferral does not exceed:
- 50 days for small and medium-sized merchants,
- 14 days for large merchants selling online.
For large e-shops, this regime is rather difficult to use in practice. If they wish to continue offering BNPL on a broader scale, they will either need to obtain a consumer credit licence or choose to cooperate with a licensed provider who will assume the full regulatory burden.
For merchants’ management, this primarily means the need to review contractual documentation and the entire business model, reset the payment process and user environment (especially as regards obtaining consents and the moment when the credit agreement is concluded), establish and thoroughly document the process for assessing creditworthiness, check that marketing and advertising comply with the new rules, and evaluate licensing and registration obligations vis-à-vis the Czech National Bank.
In addition to the risk of non-payment itself, a BNPL provider must therefore primarily address who the creditor is in the given model, how long the payment deferral is, and what costs the consumer bears – that is, whether the terms of the arrangement comply with the consumer credit regime under the amendment to the Consumer Credit Act and CCD2 (Directive (EU) 2023/2225 of the European Parliament and of the Council).
If you are considering modifying your existing BNPL model or introducing a new deferred payment structure and need help with setting up the product, documentation or licensing requirements, please do not hesitate to contact us.