New Paypal research reveals UK business owners are optimistic about upcoming BNPL regulation
With weeks to go until FCA Deferred Payment Credit (buy now pay later) regulation comes into force, PayPal research reveals UK companies are optimistic about the impact of the changes, with 64% believing regulation will help their business as they think it will improve consumer trust (59%) and transparency (58%).
Its survey of 1,000 British business owners and representatives found that 49% believe the regulation will help them create a more sustainable long term business model. 23% plan to increase their BNPL offering after implementation, believing the changes will provide better quality of customers (20%) due to increased consumer confidence in these products and in turn help improve conversion and sales (18%). Yet some businesses remain concerned about affordability checks reducing conversion rates (19%), increased legal risk (18%) and compliance costs (16%).
Tamer El-Emary, General Manager UK at PayPal, says: “For businesses providing Pay in 32, there is no disruption and no action required. We’ve long shared our support for proportionate BNPL regulation and, like the British businesses we’ve heard from, believe it will help strengthen confidence in the payment category while supporting long term, sustainable growth. We are well prepared for the new requirements, with many of them reflecting practices we've had in place for some time, so we don’t expect to see any changes in our conversion rates.”
El-Emary adds “It’s a great opportunity for merchants; our Pay in 3 service has a 129% higher average order value than standard PayPal transactions - there’s a payment option that can help drive growth without adding credit risk to your business.”
Trust is an important factor in how merchants evaluate payment providers, with 65% saying trust and brand reputation matter most when choosing a BNPL provider. The research also found: 65% want clearer guidance on regulation and compliance from providers; 51% want support updating checkout and customer journeys; 49% want tools to help communicate BNPL responsibly to customers
David Winstanley, Director at Pramworld, comments: “We think the regulation is a positive step for BNPL. We've been working PayPal for 14 years and have found being able to offer Pay in 3 has made a huge difference to our growth, but the regulation will give shoppers added trust and transparency, enabling them to make more confident purchase decisions by paying flexibly for higher-ticket items.”
Richard Tanner, Chairman at Farrar & Tanner, sys: “Payment flexibility really helps our customers when buying home or gift items– where they don’t want to compromise on price but want to buy a heritage quality item either for themselves or for a loved one. Trust is key in the buying journey though - a well known brand like PayPal already gave our customers confidence in deferring payments and the regulation will add to that credibility. As a business, offering a flexible payment option that helps our customers, with no friction - and we still get the money upfront - is a no brainer.”
2026 RTIH Innovation Awards
Payments will be a key focus area at the 2026 RTIH Innovation Awards.
The awards are now open for entries and celebrate global retail technology innovation in a fast moving omnichannel world.
Our winners will be revealed at the 2026 RTIH Innovation Awards Ceremony, taking place at The HAC in Central London on Wednesday, 4th November.
Check out our 2025 winners here.
Our 2025 hall of fame entrants were revealed during a sold out event which took place at The HAC on 16th October and consisted of a drinks reception, three course meal, and awards ceremony presided over by award winning comedian, actress and writer Tiff Stevenson.
In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “This is the awards’ fifth year as a physical event. We started off with just 30 people at the South Place Hotel not far from here, then moved to London Bridge Hotel, then The Barbican, and last year RIBA’s HQ in the West End.”
“But I’m conscious of the fact that, to quote the legend that is Taylor Swift, You’re only as hot as your last hit, baby. So, this year we’ve moved to our biggest venue yet, and also pulled in our largest number of entries to date and broken attendance records.”
He added: “This year’s submissions have without doubt been our best yet. To quote one of the judges: The examples of innovative developments across both traditional and digital retail spaces were truly remarkable.”
Congratulations to our winners, and a big thank you to our sponsors, judging panel, the legend that is Tiff Stevenson, and all those who attended our 2025 gathering.
