DPC Regulation and Retail Finance: A Merchant's Guide to FCA Compliance

Overview

If you offer finance to customers at point of sale or are considering it for your business, you're probably familiar with Deferred Payment Credit (DPC) regulation.  

DPC came into force in July 2026 and brought Buy Now Pay Later (BNPL) products under the same Consumer Credit Act framework that has always covered longer term retail finance. 

In the run up to the regulation coming into effect most of the conversation focused on the lenders: what they needed to update, how they were preparing and whether the products available would change.  

Less of it explained what this means for you as a merchant. For merchants, the practical questions are simple: 

• Is your checkout affected? 

• Do you need to update any website or marketing copy? 

• What does the change mean for your customers? 

• Will affordability checks impact approval rates? 

This guide covers all the above, from a regulated lender that went through the implementation. 

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Merchants should not have to choose between compliance and conversion, and customers should not have to choose between flexibility and clarity.

Tom Curtis

Head of Merchant Services, Zopa Bank

What DPC regulation changed - and what it didn't

The FCA's Deferred Payment Credit framework introduced stronger protections for customers using BNPL products - short term, interest free, deferred payment, by bringing it under the Consumer Credit Act. Before 15 July 2026, BNPL was largely unregulated. After it, those products require FCA authorisation, affordability assessment and the consumer protections that come with regulated credit. 

For merchants already offering longer term retail finance through a regulated lender like Zopa Bank, little changed in how the product works or how it's authorised. Zopa has been FCA and PRA authorised (FRN 800542) since long before DPC was introduced. The regulation didn't create new obligations for Zopa, it extended the framework to products that were previously outside it. 

What DPC did change for Zopa merchants was specific and practical. The disclosure language that had appeared on merchant websites - "interest free credit agreements of 12 months or less are not regulated by the Financial Conduct Authority" - was no longer accurate after July 15 and needed to be removed. Affordability assessments also extended across the full interest free credit portfolio. Zopa supported its merchant base through both of those changes, and for most it was a straightforward update rather than a structural one. 

The bottom line: If you've been offering retail finance through a regulated lender like Zopa Retail Finance, the changes that affected you were simple and practical - checking website copy, reviewing financial promotion and verifying integrations. If you were offering BNPL through a provider that wasn't previously regulated, the ask is more significant - those products are now regulated, and your provider should have guided you through what that means for your checkout. 

Were you already regulated or not?

The distinction that matters most isn't about your business. It's about your lender. 

When you offer finance through Zopa, you are introducing customers to the opportunity for consideration: Zopa is the one deciding whether to lend and on what terms. That means the regulatory obligations that come with being a lender sit with us, not with you. Your customers' finance agreements were regulated before DPC and remain regulated now. 

If you were offering BNPL through a provider that wasn't previously regulated, those products are now regulated. The practical question is whether your provider has updated their product, their agreements and their merchant communications to reflect that. If they haven't communicated clearly, that's the first conversation to have. 

Do you need your own FCA authorisation?

Usually no - but there's one decision worth understanding that has a real impact on what you can offer at checkout. 

To offer retail finance through Zopa, you don't need your own FCA licence or authorisation. That sits with us as the lender. You offer it, we underwrite it - and the regulatory obligations that come with making lending decisions stay on our side. 

The decision that does affect you is whether to register as an FCA credit broker. Without it, the longest finance term you can offer customers is 12 months. With it, that extends to 120 months - and you can offer up to £50,000. 

It's worth understanding what that means in practice. For a £3,000 sofa at 0%, 12 months means £250 a month. Spread over 48 months, that's £62.50. A customer who can afford one but not the other doesn't walk away because they don't want the sofa - they walk away because the payments don't work for them. Especially for businesses selling bigger ticket items - think furniture, home improvements, renewable products, bikes, or dental treatment - this is as much a sales question as a compliance one. The registration process is more straightforward than most people expect, and Zopa can help you through this. 

Did affordability rules hurt approvals at checkout? For Zopa, it didn’t

Before DPC came into effect, there was a real concern among merchants that the new affordability requirements would reduce the number of customers getting approved at checkout. If more people are declined, fewer sales are completed.  

It was a reasonable concern - but Zopa's approval rates didn't decrease after DPC came into effect - and here's why.  

What sits behind the approval rates

The usual way to check affordability is to estimate what a customer spends on essentials from a national average for a household like theirs. An average is wrong for almost everyone. It overstates spending for some customers and understates it for others, so a lender relying on it must build in a margin of caution. That margin is where the declines come from: customers turned away who could comfortably have paid. 

We assess affordability using multi-layered data sources. One key source we introduced to support our assessments was from Infact, a UK credit bureau authorised by the FCA. From the details a customer enters at application, Infact estimates what that person spends on food, energy, transport, childcare and housing, rather than what an average household spends. Where a customer’s real outgoings are lower than the average, the decision reflects it. Where they are higher, it reflects that too. 

That second half is the point. Approvals held because the assessment became more accurate, not because the bar moved. Every decision meets the FCA’s affordability requirements, and the customers we approve are the ones who can afford the repayments. 

For the customer, there is no extra step. No documents to upload and no bank account to connect. The assessment runs on the information they have already entered at checkout. 

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An average tells you what a typical household spends. It tells you nothing about the person at the checkout. Zopa for Business assesses each customer on their own numbers, and that is how they met the new DPC requirements without turning away people who could comfortably afford to pay.

James Bryce-Lind

VP Commercial, Infact

Running affordability assessments properly - with the right data, a checkout journey that's straightforward for customers to complete, and credit decisions that are accurate rather than overly cautious - means you can meet the regulatory requirement without the commercial cost. The work involved real changes to how we assess applications. The result was that our merchants didn't experience the drop in conversions many had been bracing for. 

It's also worth knowing that Zopa has never charged late fees and won't start now - so merchants and customers aren't affected by the new caps on late charges that will affect some providers. 

Getting DPC right doesn't mean accepting lower conversions. Done properly, it doesn't have to cost you anything at checkout. If you're talking to finance providers, it's reasonable to ask: did your approval rates change after DPC, and what did you do about it?

Which compliance obligations actually sit with the merchant

The lender manages the lending decision and credit agreement. As a merchant, your focus is the customer experience and content you control. 

There are specific things that sit with you as the merchant - and they're worth checking. Here's the six step checklist we gave our customers when DPC came into force: 

1. Check your website copy. Remove all "unregulated" language from your website

If your website, footer, or finance page includes the disclosure that finance agreements of 12 months or less "are not regulated by the Financial Conduct Authority," that needs to go. It was accurate before July 2026. It isn't now. 

2. Update your checkout financial promotions

Any copy describing the finance product - at checkout, in emails, in marketing materials - must not misrepresent its regulated status. FCA financial promotion rules apply to how you describe credit products. 

3. Review your checkout plugin or integration

The Zopa checkout widget updated automatically for most merchants. Dedicated finance pages, footer disclosures, and any branded content hosted on your own website are your responsibility to update separately. 

4. Update marketing and advertising materials

Email templates, brochures, in-store signage, and digital advertising that references the finance product should be checked. 

5. Make it easy for customers to get help

Customers using short-term 0% finance now have recourse to the Financial Ombudsman Service. Your customer-facing communications - including what happens when a customer is declined - should reflect this. 

6. Keep your product and service information accurate. Understand that Section 75 now applies

See below. 

Section 75: the change most merchants haven't heard about but need to know

Before DPC, short term 0% finance agreements - 12 months or less - were unregulated. Section 75 of the Consumer Credit Act, which gives customers protections when goods are faulty, not delivered, or misrepresented, didn't apply to them. 

After DPC, it does. Customers who finance a purchase between £100 and £30,000 through Zopa now have Section 75 protections. If there's a problem with the goods or service, they can make a claim against Zopa as the lender as well as against the merchant. 

For the merchant, the primary Section 75 liability sits with Zopa as the regulated lender. What you own is the customer experience - making sure your returns and disputes process is clear, your product descriptions are accurate, and your customer-facing communications don't create problems you don't need. Not because the legal exposure falls on you, but because accurate descriptions and clear processes are what prevent disputes from arising in the first place. 

There's a commercial way to read this too: customers who know they have stronger protections tend to buy with more confidence. Section 75 is as much a selling point for regulated finance as it is a compliance obligation. 

What the right setup delivers: PSCL Beds story

When PSCL Beds introduced Zopa Retail Finance, their average order values had been rising and customers were becoming more deliberate about larger purchases - more likely to pause, reconsider, and drop out at checkout than they had been before. 

Offering finance changed that. Customers who used finance spent 30 - 40% more per order than those who didn't.  

PSCL Beds' story isn't about compliance - it's about giving customers a way to buy that works for them. But the conditions that produce that result are the same ones this guide is about: a regulated lender, a smooth checkout, and terms that are genuinely affordable. Getting those things right isn't a box-ticking exercise. It's what makes the commercial outcome possible. 

Read the full story. 

Next steps: reviewing your checkout with Zopa

If you're already using Zopa Retail Finance: the six step checklist above to review your website copy and marketing materials, particularly around any mentioned "unregulated" finance. If anything needs updating or you're not sure, your account manager is the right first call. 

If you're considering retail finance: the compliance picture is more straightforward than it can look from the outside. Working with a regulated lender means most of the regulatory weight sits with us, and our job is to make the checkout work as well as it can for your customers. Speak to the Zopa team about what that looks like for your business. 

This guide is for informational purposes only and does not constitute legal or regulatory advice. If you have specific questions about your compliance position, you should seek independent legal advice. 

FAQs

Do I need FCA authorisation to offer 0% finance at my checkout?

Not if you're offering it through a regulated lender. The FCA authorisation sits with the lender. Zopa Bank holds FCA and PRA authorisation (FRN 800542) and underwrites every credit application. As a merchant, you operate as a credit broker, which means your compliance obligations are substantially lighter than if you were the lender yourself. The one thing that does affect you: to offer terms longer than 12 months, you'll need FCA credit broker registration. Zopa can help with that process. 

What's the difference between BNPL and regulated retail finance for merchants?

BNPL - short term, deferred payment, typically interest-free - was largely unregulated until July 2026, when the FCA's DPC framework brought it under the Consumer Credit Act. Regulated retail finance, offered through a bank like Zopa, has been under that same framework throughout. For merchants, the practical differences are significant: regulated retail finance supports terms up to 120 months and amounts up to £50,000, with full consumer protections including FOS access and Section 75 rights. If you're trying to decide which to offer, the term flexibility and the approval rate performance of a regulated lender are both worth factoring in alongside compliance requirements. 

What rules apply to me as a retailer offering consumer credit?

The core rule is that whoever provides the credit needs to be FCA authorised. If you're offering finance through a regulated lender like Zopa, the authorisation and the primary compliance obligations sit with the lender. Your obligations as the retailer centre on how you describe and promote the product: financial promotions must be fair, clear, and not misleading; checkout copy must accurately represent the terms; and customers need a clear path if they want to complain or were declined. If you want to offer terms beyond 12 months, FCA credit broker registration is required - Zopa can walk you through that. 

Does Consumer Duty apply to me as a merchant offering finance?

Consumer Duty is the FCA's framework requiring firms to deliver good outcomes for customers - acting in their genuine interest, not just meeting minimum compliance requirements. If you offer finance through a regulated lender, Consumer Duty applies primarily to Zopa as the authorised firm. Your obligations as a merchant sit in the areas you control: clear and honest marketing, a checkout that doesn't create confusion, accessible support if something goes wrong, and a product that's genuinely suitable for your customers. Working with a regulated lender whose credit decisions and customer communications are built around Consumer Duty standards is the most direct way to make sure the finance you offer is doing what it should.