Project Overview
A UK fintech wanted to build a regulated BNPL (Buy Now Pay Later) platform. FCA regulation of BNPL was confirm...
Technology Stack
Compliance & Standards
The Challenge
A UK fintech wanted to build a regulated BNPL (Buy Now Pay Later) platform. FCA regulation of BNPL was confirmed in the Financial Services and Markets Bill 2023 — the client needed to be FCA-ready before the compliance deadline. FCA Consumer Duty, Consumer Credit Act 1974 (regulated agreements), FCA CONC, affordability assessment, credit file reporting (CRAs), and AML/KYC were the requirements. The platform would serve 150 merchant partners and their customers. Budget: £150,000.
Our Approach
FCA Consumer Credit Act Agreement Engine
BNPL is regulated credit under CCA 1974.
Regulated agreement generation
Pre-Contract Credit Information (PCCI) in CONC 4 Annex 1 prescribed form, credit agreement in Annex 2 prescribed form (must be accurately reproduced — any deviation is an offence), Total Amount Payable calculation, Annual Percentage Rate (APR), and cooling-off rights (14 days withdrawal).
Agreement signing
digital signature (eIDAS-equivalent — qualified electronic signature via DocuSign or similar).
CONC 5
- creditworthiness and affordability assessment mandatory before granting BNPL credit.
- Soft credit search (Experian/Equifax) for credit history.
- Open Banking AISP (TrueLayer): income and expenditure from bank statements.
Income stress test
can the customer afford repayments if income reduced by 15%?
Monthly disposable income check
repayment must not exceed 35% of disposable income.
Vulnerable customer flag
financial difficulty indicators trigger referral to specialist support.
Credit Reference Agency Reporting
BNPL credit must be reported to CRAs (Experian, Equifax, TransUnion) under FCA requirements to prevent hidden debt accumulation.
CRA reporting API
monthly batch submission of BNPL account openings, balances, payments, defaults.
Default reporting
CONC 7 (fair treatment of customers in financial difficulty) — default reported only after 60+ days missed payment and after contact attempts.
FCA Consumer Duty
- default reporting must not unfairly damage customer credit file.
- Merchant API and Consumer-
Merchant REST API
eligibility check (pre-qualification, no credit impact), order capture, refund, and partial return.
Consumer checkout
embedded Stripe Elements-style BNPL widget (merchants embed JS snippet — no PCI-DSS scope on merchant).
Consumer portal
payment schedule view, payment history, early settlement calculator.
FCA Consumer Duty Consumer Understanding
payment schedule in plain language — "You will pay £X on DATE, £X on DATE, £X on DATE."
The Results
Platform live at 20 weeks, £142,000 — under budget.
FCA regulatory notification submitted at launch. 42 merchant partners live in first 3 months.
BNPL agreements: 18,400 in first 6 months.
Affordability rejection rate: 12% (industry benchmark: 8–15%).
CRA reporting: automated monthly — first submission delivered on time.
FCA Consumer Duty audit: no adverse findings.
Consumer satisfaction: 4.3/5.
Zero complaints to Financial Ombudsman in first 6 months.
“FCA-ready platform with zero adverse findings on Consumer Duty audit. The CCA agreement generation was the most complex part — the prescribed form requirements are unforgiving. 18,400 agreements in 6 months and zero FOS complaints. The merchant API response time is under 200ms — faster than any of our merchants expected." — CEO, UK BNPL FinTech (name withheld)”
Project Details
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