July was a milestone for Buy Now, Pay Later. But for retailers, the more interesting question now isn't what the rules say. It's what comes next for a payment option that has become a significant part of the UK credit market.
With qualifying Deferred Payment Credit (DPC) now regulated, the conversation can move beyond getting ready. The next chapter is about how providers compete, how customers experience finance and where interest-free payment options fit into your offer.
A mainstream payment option enters a new chapter
DPC wasn't a niche product waiting for regulation to make it relevant. The FCA reports that lending grew from £60 million in 2017 to more than £13 billion in 2024. That growth predates July's changes, but shows the scale of the market now operating under the new framework.
Since 15 July 2026, qualifying interest-free agreements from third-party lenders have come under FCA regulation, bringing requirements around affordability, customer information and support. DPC covers credit repaid in 12 or fewer instalments over no more than 12 months.
The FCA has said it expects the sector to continue growing, while recognising that customers for whom DPC is unaffordable may no longer be able to access it. That's a more useful picture of what comes next: continued potential, with responsible lending at its core.
Our earlier guide covers what changed in July. Here, we're looking at what that means for the next phase of retail finance.
The competitive conversation has changed
Before July, qualifying DPC sat outside FCA regulation. Now those third-party lenders must meet regulatory requirements too. That narrows an important distinction between previously exempt DPC and established regulated finance, even though the products and detailed rules aren't identical.
For retailers, that creates a stronger basis for looking beyond the payment button. How well does the option suit your products? Is the application easy to understand? What happens when a customer needs help after the sale?
Our view is that these are the areas where providers should earn your business next. Regulation sets requirements; the quality of the experience still gives retailers meaningful choices.
The opportunity isn't simply to offer more ways to pay. It's to choose options that make sense for what you sell and the customers buying it.
A quick checkout still matters. So does what follows
Nobody wants a confusing application to get between a customer and their purchase. But the next phase of DPC shouldn't be judged on speed alone. Customers also need to understand their repayments and have somewhere to turn if things go wrong.
New qualifying agreements come with access to the Financial Ombudsman Service for eligible complaints and Section 75 protection on eligible purchases, subject to conditions. Lenders must also offer appropriate support to customers approaching or experiencing financial difficulty.
Those protections don't prove that customer confidence or sales have increased. They do make the experience after checkout a more important part of the provider comparison, rather than an afterthought.
Peak trading brings the next practical test
Black Friday and Christmas will be the first under the new DPC framework. That makes the coming weeks a useful opportunity to understand how payment options perform through a different trading period, from applications to post-purchase questions.
The balance is clear: make it easy for customers to understand their options without encouraging borrowing they can't afford. Proportionate creditworthiness and affordability checks are part of regulated DPC, not an obstacle to work around.
The FCA's framework aims to support sustainable, affordable borrowing. For retailers, the useful question is how well the whole experience works, not simply how many applications receive a yes.
Where could the market go next?
Regulation hasn't settled every question about DPC's future. For retailers, these are the developments worth watching as the market moves into 2027.
Competition on more than convenience
With previously exempt lenders now inside the regulatory framework, there is room for the conversation to move beyond a quick integration or familiar brand name. The strength of the wider service deserves attention too.
The differences that matter include:
payment options suited to your products and purchase values;
clear applications online and in-store;
useful reporting on how finance is performing;
support for your business and customers after the sale.
Better explanations, not just more information
More protection is valuable, but customers still need to understand the option in front of them. The next step should be making essential information easy to use, rather than adding words for customers to navigate.
how much will I repay?
when will I make the payments?
what am I agreeing to?
what happens after I apply?
where can I get help?
These questions won't disappear because DPC is regulated. How well providers answer them is still a meaningful difference in the shopping experience.
A closer look at the finance mix
DPC is one part of retail finance, not a replacement for every other option. A short repayment period may suit one purchase, while another calls for a different term or product. Looking ahead, the stronger proposition is a considered choice of ways to pay, rather than assuming one option fits every customer.
Results that show the full picture
As more post-July trading data becomes available, retailers will have a better basis for assessing application completion, lending decisions and customer enquiries. Sales figures alone won't explain whether a payment option is working well.
Seasonality, promotions and purchase values will matter too. The aim is to understand what sits behind the results, rather than crediting or blaming July's changes for every movement.
Experience matters in the next chapter
For established regulated finance providers, responsible lending isn't a new direction. July brought previously exempt DPC into that wider conversation, making experience in regulated credit relevant to the market's next phase.
At V12 Retail Finance, our starting point is your business: what you sell, who buys it and how finance can fit. That keeps the conversation focused on the right offer for your customers, rather than a payment option in isolation.
Our focus is finance that fits: responsible payment options designed around your business and your customers, backed by decades of experience in regulated consumer finance.
Beyond July, towards 2027
Regulation was a significant change, not the end of the story. The next chapter will be shaped by how lenders combine responsible decisions with clear applications, useful payment choices and support that lasts beyond checkout.
For retailers, that's a more useful conversation than another countdown to compliance: not whether finance is available, but how well it fits your business and the people shopping with you.
Finance that fits your business and your customers
Whether you're already offering retail finance or considering introducing it, V12 Retail Finance can help you deliver a responsible finance solution designed around your business and its customers.
Find out more about becoming a V12 Retail Finance partner and giving your customers more ways to say yes.