Increased Provisions enacted during a 'Historic Year' marked by significant customer expansion
Zilch Embraces New UK Buy Now, Pay Later Regulations
In a significant move for the UK's fintech industry, Buy Now, Pay Later (BNPL) services have come under formal regulation by the Financial Conduct Authority (FCA) following government legislation in July 2025. This regulatory framework, specifically targeting third-party lenders offering BNPL, will officially take effect on 15 July 2026.
The new regulations aim to create a proportionate regulatory approach, focusing on improving consumer safeguards while supporting market innovation and sustainable lending growth. Key aspects of the regulation include creditworthiness assessments, clear pre-contractual disclosures, ongoing communications about repayments, complaint handling and dispute resolution procedures, and adherence to the Consumer Duty.
Zilch, a UK-based fintech company and the UK's fastest growing fintech unicorn, has welcomed the new regulations as a step towards improving consumer financial wellness and removing credit-related anxiety for their customers. As a company that has been FCA-regulated since 2020, Zilch has already implemented many of the proposed requirements.
According to the company's latest financial report, Zilch has more than 5 million registered customers, a 79% reduction in net losses to £10.5m, and a revenue surge of 93% to £110.3m for 2025. The company also booked its first quarterly profit in July 2024, although the size of the profit was not disclosed.
In addition, Zilch's GMV, or total sales completed with the service, increased by 73% to £1.9bn, and the average number of employees for the year rose to 255 from 235. The company also plans to hire more than 400 people over the next year and a half in the UK.
Despite the pay cut taken by CEO Philip Belamant, with his pay packet falling to just over £1m, compared to £1.34m the year prior, Belamant expressed that listing in London would be "fantastic" and "the right thing." This interest in a potential listing in the City within the last 12 months aligns with the government's aim to end the "wild west" of BNPL regulation and protect consumers.
The new regulations will require financial services providers to conduct affordability checks as part of efforts to make banking standards more consistent under the watch of the FCA. This move is particularly important given data showing BNPL users are often younger and more financially vulnerable. The regulations will also mandate clear pre-contractual disclosures, ongoing communications regarding repayments, and transparency about product terms, as well as complaint handling and dispute resolution procedures aligned with Consumer Credit Act standards and access to independent dispute resolution.
In summary, BNPL in the UK is transitioning from an unregulated to a regulated credit product focused on third-party lenders, with comprehensive requirements on credit checks, customer information, and complaint management effective mid-2026. The aim is to improve consumer safeties, particularly given the financial vulnerability of many BNPL users, while supporting market innovation and sustainable lending growth.
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