Is Your BPNL Business Ready for the Government’s Changes?

The Buy Now, Pay Later (BNPL) sector in Australia is evolving, with significant changes fast approaching following the passage of the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024.

Overview of BNPL Regulatory Changes

As of 10^th December 2024, BNPL products were categorised as Low-Cost Credit Contracts (LCCCs) under the Credit Act following royal assent of the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 (Cth)*. From 10 June 2025, this classification mandates BNPL providers to:

• Obtain an Australian Credit Licence (ACL)
• Become a member of the Australian Financial Complaints Authority (AFCA)
• Implement ASIC-approved dispute resolution procedures
• Adhere to responsible lending obligations (RLOs), though in a modified form tailored to BNPL’s risk profile.¹

Insurance Implications of the new BNPL Regulation

Holding an ACL brings with it the need to comply with ASIC’s Regulatory Guide 210 (RG 210), including risk management processes and insurance, unless exempted. Because RG 210 requirements typically need to be implemented prior to the granting of an ACL, it is important that you work with your specialist Financial Institutions (FI) insurance broker as soon as possible to undertake a comprehensive review of your existing insurance program to determine whether your program meets the requirements. This extends beyond just ensuring a Professional Indemnity (PI) policy is in place or reviewing the limits of your PI policy and should encompass a technical review.

Engaging with Insurers

As with any change to your business, it is important to keep your insurers across how you are addressing and approaching these regulation changes. Insurers should be considered in a similar manner to your investors. Whilst they are not investing with direct capital, they are investing in the business’ risk management. It is therefore important that they be viewed as a partner.

How you engage with your insurers is as equally as important as updating them on how your business is progressing with compliance of these regulations. Work with your specialist FI broker on how to present these changes to ensure that your insurer underwrites your business’ practical risks, rather than perceived risks.

Key Takeaways

The 2024 regulatory changes mark a major shift in Australia’s BNPL landscape. Compliance with the new framework—especially in relation to holding an ACL and RG 210—requires strategic adjustments from BNPL providers. Companies must act proactively to mitigate regulatory and financial risks while ensuring continued commitment to their customers. For further insights and to discuss whether your existing insurance program is adequate, contact Aon today.

How Aon Can Help

By undertaking a structured review process of your insurance program, we can assist in identifying where improvements can be made, as well as assisting in meeting the RG 210 requirements. Specifically, Aon’s Financial Services Group is a leader in designing bespoke professional liability solutions, including Financial Institution Professional Indemnity and Technology Liability, for BNPL providers.

If you’d like to speak to an Aon specialist on how your organisation can mitigate regulatory and financial risks, please contact us.

References 
[1] https://asic.gov.au/about-asic/news-centre/news-items/asic-alerts-buy-now-pay-later-providers-to-apply-for-a-licence-under-new-laws/
[2]https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-210-compensation-and-insurance-arrangements-for-credit-licensees/