With the rapid rise of the BNPL industry in Australia, more online businesses are seeking effective ways to integrate Buy Now, Pay Later options into their platforms. App development focused on BNPL features has become essential for retailers and service providers aiming to meet customer expectations and boost sales. However, as the government introduces new requirements for responsible lending, licensing, and compliance, businesses must ensure their BNPL integrations are not only user-friendly but also fully aligned with the latest regulations.

In this article, we’ll cover what BNPL is, why it’s popular in Australia, the challenges of adoption, recent legal changes, and how to successfully implement BNPL payment options in your software.

What is BNPL?

BNPL stands for Buy Now, Pay Later. It’s a payment method that lets customers buy products and services right away and pay for them over time. BNPL providers pay the retailer upfront for the purchase. The customer then repays the BNPL provider in several payments, usually interest-free if they pay on time. Some providers allow payments over a few weeks, while others offer longer plans.

BNPL can help retailers increase sales by giving customers more flexibility. Many financial institutions and e-commerce platforms now work with BNPL providers to offer this payment option.

Why is BNPL so popular in Australia

The Australian BNPL market is rapidly growing and highly dynamic. The market size is about USD 19.5 billion in 2025, with a forecast to expand to USD 42.23 billion by 2030, growing at a CAGR of around16.7%.

Key players dominating the BNPL market include Afterpay, Zip Co, and Humm, with global entrants like Klarna and PayPal also active. Afterpay alone controls around 43.8% of the market with millions of active users. The BNPL service is expanding beyond traditional retail into sectors like automotive, healthcare, education, and home furnishings.

As for other regions, the BNPL sector is growing quickly in the United Kingdom and Asia Pacific, driven by digital payment adoption and rising consumer demand. Both regions are seeing new regulations to ensure responsible lending and protect consumers.

Growth factors

In Australia, Buy Now Pay Later has been adopted quickly and has become a common way for people to pay online and in stores. There are several reasons for this popularity, both on the consumer and business sides.

Many Australians, especially younger adults like Gen Z, want more choice and flexibility when it comes to payments, since they may not use credit cards or want to avoid debt. Trust in digital services is high in Australia, and consumers have become comfortable with new financial services.

Retailers and e-commerce platforms have also helped drive the BNPL sector’s growth. When shoppers can pay later, they are more likely to complete their purchases, and may even spend more overall. This makes BNPL a useful tool for businesses competing in a crowded market. Australia’s strong digital infrastructure has strong support for innovation, and regulations have allowed BNPL usage to grow without strict oversight, at least for now.

Challenges of adopting BNPL

The benefits of adopting BNPL solutions are clear — flexibility for customers, sales growth for businesses. However, there’s no such tech innovation that comes without drawbacks. Here are the major challenges of BNPL:

BNPL systems need to be well-integrated with sales, accounting, and customer service tools. This can require time and resources, and there may also be extra fees or charges from BNPL platforms, which can affect profit margins.

Though the BNPL companies usually cover the payment risk, businesses still need to keep an eye on disputes, refunds, and chargebacks, which can lead to extra work.

On the financial side, some businesses notice changes in customer behaviour. While sales may grow, some BNPL users might buy more than they can afford, which can lead to more product returns and customer complaints.

In Australia, Buy Now Pay Later legal regulations have been changed recently. The government introduces new laws to regulate BNPL as a credit product under the Credit Act. BNPL lenders will have to follow rules like responsible lending obligations, checking that customers can afford to make repayments. They must also hold an Australian credit licence and meet conduct obligations similar to other credit providers. This means businesses offering BNPL may face extra compliance rules, disclosures, and changes to customer processes.

Let’s look at these changes in detail.

Law changes in Australia

From 10 June 2025, all BNPL arrangements in Australia must comply with the National Consumer Credit Protection Act 2009 (NCCP Act) and associated regulations, bringing BNPL products into the same legal framework as traditional credit, but with tailored, low-cost credit contract (LCCC) provisions designed to balance consumer protection and industry innovation. These changes have been strongly supported by industry groups like the Australian Finance Industry Association (AFIA) and reflect best practices seen in other markets, such as the regulations set by the Consumer Financial Protection Bureau in the United States.

Key obligations for BNPL providers

Credit licensing: Must hold an Australian Credit Licence (ACL) authorising credit activities and lodge by 10 June 2025

AFCA membership: Must join the Australian Financial Complaints Authority prior to offering BNPL products

Responsible Lending Obligations (RLO): Must check each customer’s financial situation and decide if the contract suits them. For higher-risk products, they must do a deeper check. If the contract is under AUD 2,000, they can assume it’s suitable, but still need to do some basic financial checks.

Fee caps: Total BNPL fees can be up to AUD 200 in the first year and AUD 125 each year after that. If a customer misses payments, late fees are capped at AUD 10 per month.

Disclosure and contractual requirements: Must provide clear disclosures of fees, terms, and hardship processes as well as update all BNPL contracts to comply with NCCP regulations

Anti-avoidance measures: BNPL firms cannot design their products to avoid credit laws. ASIC will watch for and act on any rule-breaking.

Consumer protections

Responsible lending: Providers must decline contracts if they would cause serious financial problems for the customer. They must give a written reason if asked.

Dispute resolution: Providers must join AFCA, so customers have access to an independent complaints service.

Hardship support: Providers must have clear steps to help customers in financial difficulty, just like with traditional credit.

For businesses offering BNPL options, this means it’s critical to partner with providers who are fully licensed, compliant, and transparent about costs and processes. Integrating with BNPL solutions will now involve more rigorous onboarding and ongoing compliance checks, both for your business and your BNPL partner. While these rules protect consumers and create fairer, more stable payment options, they also increase oversight and operational demands.

How to implement BNPL payment options in compliance with regulations

Australian businesses can implement BNPL transactions by integrating with third-party providers such as Afterpay, Zip, or Humm. This is the fastest and most reliable way to create a Buy Now Pay Later app. Building a BNPL solution from scratch is possible, but it requires significant investment in technology, risk management, and compliance — making it unprofitable for most businesses.

Research popular BNPL providers in your area, compare their fees, customer experience, setup process, and support. Pick the one that matches your business needs and suits your customers. Each provider will have its own rules and integration steps. Make sure your business meets their requirements, such as minimum sales volume or approved product types.

When you connect to a third-party BNPL provider, make sure they:

• Hold a valid Australian credit licence
• Use responsible lending checks, ensuring the customer can repay
• Provide all legal disclosures to customers
• Meet data privacy and security obligations
• Offer clear complaint and hardship procedures

Most BNPL providers offer plugins for popular platforms like Shopify, WooCommerce, Magento, or BigCommerce. If you have a custom website or app, your developers can use the provider’s API or SDK to add BNPL at checkout. This will show the BNPL option alongside other payment methods.

When you partner with a licensed BNPL provider, most compliance responsibilities are handled by them. Even so, your business should:

• Display terms and conditions clearly in your app or website
• Store and process customer data in line with Australian privacy law (such as the Privacy Act)
• Set up workflows to manage returns, refunds, and complaints according to BNPL regulation
• Stay updated on any changes to credit and privacy requirements

Once integrated, you can add the BNPL option to your online checkout. At checkout, customers choose the BNPL provider, enter necessary details, and receive approval or denial within seconds. KYC checks — such as verifying ID and creditworthiness — happen automatically in the background.

Our expertise in Buy Now Pay Later app development

At Ronas IT, we’re experienced in integrating third-party payment solutions into software, including BNPL options. We use the service providers’ SDKs and APIs for BNPL app development. Here are some examples of our work:

We designed and developed a mobile marketplace app that connects eco-conscious Australian consumers with local manufacturers of organic and cruelty-free cosmetics. We handled the entire process — from business analysis and UX/UI design to mobile app and admin panel development — using React Native for the app and Laravel for the backend.

To deliver secure, flexible payments, we integrated Stripe Connect, which supports popular Australian BNPL providers like Afterpay and Zip. This allowed us to easily offer BNPL options and fast payouts to sellers, and also automate Know Your Business (KYB) checks through Stripe, saving integration time and meeting strict regulatory standards. As a result, the client received a modern, scalable, and fully compliant BNPL app ready for the Australian market, helping local eco brands reach customers more easily and stand out among large competitors.

We developed a neobank app that helps US users build their credit score and access secured charge cards, even with limited credit history. Our team designed a clean, user-friendly interface and built a robust, microservice-based system using React Native for mobile and Laravel for backend, focusing on high security and regulatory compliance.

To implement secure payments and banking functionality, we integrated Bond as our Banking-as-a-Service (BaaS) platform. This allowed us to connect the app with major US banks and automate account creation, card issuing, and direct deposits. We ensured regulatory compliance with SOC 2, PCI DSS, and ISO/IEC 27001 standards. For KYC, we used Persona and Sardine for identity and fraud checks, sending user data straight to verification and banking partners — never storing it on our servers.

If you need to integrate BNPL payments into your app, we can help

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To conclude

The rapid adoption and impressive growth of Australia Buy Now Pay Later services show that flexible payment options are now a must for retailers, e-commerce platforms, and a broad range of LCCC providers. The BNPL sector in Australia is maturing quickly, and with recent legal changes, it is more important than ever for businesses to approach BNPL app development with a focus on compliance and consumer protection. Starting from June 2025, reasonable inquiries into each customer’s financial situation, clear disclosures, and alignment with national credit regulations will be essential for all providers and merchants partnering with BNPL platforms.

It’s vital to work with trusted providers who fully comply with the National Consumer Credit Protection Act and related guidelines. With the right approach to BNPL development in Australia, you can offer the convenient payment experiences your customers want — while meeting all legal requirements and supporting industry innovation. As Australia buy now pay later solutions become a standard, choosing compliant and reliable integration partners will safeguard your business and build customer trust for the long term.