EU strictness is on its way: BNPL will also be affected by the regulations this year

The amendment also affects the dominant players in the Hungarian BNPL market, instacash and Milpay, but according to the companies, the change does not jeopardize the future of the scheme. According to their statement, their systems have been developed from the beginning to comply with the Fhtv. regulations.

“Many people now encounter the topic as if deferred payment were suddenly a ‘credit’. In reality, the logic of consumer protection and information has pointed in this direction: if someone pays later, there are conditions, and these must be communicated in a clear and timely manner. That is why we at instacash have built the service from the beginning to fit the expectations of the Fhtv. – from creditworthiness checks to prudent communication,” said Géza Bruzsa, fintech expert and CEO of instacash and Milpay.

An EU directive is in the background

The background to the domestic legislative amendment is the EU Consumer Credit Directive, which aims to adapt credit regulation to the digitalized financial market. The EU aims to strengthen transparency, increase consumer protection and establish more uniform responsible lending practices – now extended to new types of financial solutions, including BNPL structures.

The BNPL threshold of 14–50 days is coming

The amendment also draws a clear line: in the case of interest-free deferred payment – ​​depending on the size of the merchant and the method of concluding the contract – in the case of a payment deadline not exceeding 14 or 50 days, the rules of the Fhtv. do not have to be applied. Above these thresholds, however, similar expectations to consumer loans come into effect, with particular regard to information and responsible lending.

“With ‘pay in 30 days’ type offers, the question is not whether such solutions will remain, but within what framework. A payment method where users pay without delay in 99.5 percent of cases cannot disappear. The legislative goal is that the consumer should not be confronted with the conditions afterwards, but should receive accurate, comparable information before making a decision”

– added Géza Bruzsa.

According to the CEO, the real-time capacity analysis applied by instacash already protects customers from overspending, which is considered a unique solution in the domestic and Central European BNPL market.

A market-shaping effect may occur

According to instacash, regulatory tightening may have a market-shaping effect. Those service providers that have so far relied less on structured information and prudent operation may be forced to adapt, while those that follow responsible practices may continue to operate more stably.

“Our message to our partners is simple: the framework is changing, but the goal remains the same – to provide a secure, transparent and functional deferred payment solution in a fast, automated process,” said Géza Bruzsa, indicating that the company will provide its partners with further information regarding the legislative changes in the coming months.