France Tightens Regulations on ‘Buy Now, Pay Later’ Services
France is set to impose stricter regulations on consumer credit, including “buy now, pay later” (BNPL) services, in an effort to curb rising personal debt. The new rules, stemming from a European directive, will come into effect on November 20, 2026, according to a decree published Friday, , in the Journal officiel.
The regulations aim to increase transparency and provide greater protection for borrowers, particularly concerning previously less-regulated credit products. These include interest-free loans, small loans under €200, short-term credit with deferred payments, consumer credit between €75,000 and €100,000, and lease-to-own contracts. Lenders will be required to provide more detailed information to customers and will be encouraged to consult the national registry of credit repayment incidents (FICP) when assessing creditworthiness.
The move comes amid growing concerns about over-indebtedness in France. According to the Bank of France, personal debt has increased by nearly 10% in the past year, following a similar rise in 2024.
BNPL services, offered by both established financial institutions like Cofidis (Crédit Mutuel) and Cetelem (BNP Paribas) and newer fintech companies such as Alma and Younited, have been identified as a contributing factor to this trend. The sector has experienced robust growth in recent years, with the French BNPL market expected to reach US$15.13 billion in 2026, a 17.4% annual increase. Projections indicate continued expansion, with a compound annual growth rate (CAGR) of 12.6% forecast between 2026 and 2031, potentially reaching US$27.42 billion by 2031.
Particular attention is being paid to “mini-credits” – small loans of a few hundred euros – which are increasingly popular among younger consumers and are linked to rising levels of debt. François Villeroy de Galhau, Governor of the Bank of France, recently described these types of loans as a “soft drug,” calling for increased regulation.
The new rules are a transposition into French law of a European directive adopted in late 2023. The directive seeks to harmonize regulations across Europe, addressing concerns about the increasing accessibility of small loans and the potential for consumers to become overextended. The decree implementing the directive was based on an ordinance published in early September 2025, providing businesses time to adapt their practices and contracts.
Experts anticipate increased competition among BNPL providers in the coming years, focusing on compliance, credit risk assessment, and integration with payment service providers (PSPs) and retailers. Bank-backed BNPL models are expected to gain prominence, while fintech companies will likely seek scalable funding partnerships. The market is predicted to consolidate, with fewer, multi-sector regulated players dominating the landscape.
The Consumer Credit Directive 2 (CCD2) is expected to have a significant impact on BNPL services across Europe, enforcing stricter regulations on fee caps, credit assessments, and transparency. This aims to enhance consumer protection while addressing growing debt concerns.
