Buy now, pay later companies operating in Ireland will now need to be authorised by the Central Bank of Ireland, following an extension to the Consumer Protection Act 2022.
The Central Bank said this legislation allows it to close a consumer protection gap. Consumers that enter into a hire purchase including PCP, consumer hire and indirect credit agreements will now be protected.
It stated that firms offering these services already can avail transitional authorisation arrangements.
The new legislation also introduces an interest rate cap of 23% APR on all credit agreements provided to consumers, other than money lending agreements which have a separate regulatory framework.
Gerry Cross, director of financial regulation – policy and risk, said, “We welcome this legislation as it closes a gap so that providers and servicers of hire purchase including PCP, consumer hire and indirect credit (e.g. BNPL) will now need to be authorised by the Central Bank.
Extending our consumer protection framework to these firms will ensure that Irish consumers receive the same protections that we require of other financial service providers. Our aim is to ensure that consumers have the same level of protection no matter where they source their financial services.”
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