The new EU credit rules move the pay-later credit check into the first purchase
In November 2021, when the Australian BNPL company Zip finalised its acquisition of Twisto for 89 million euros, the Prague-based firm’s founder and chief executive Michal Smida gave PYMNTS a simple explanation for its growth. A one-click payment experience, he said, was what won over European shoppers who had mostly preferred cash. Twisto then operated in the Czech Republic, Poland and the United Kingdom. According to Smida, its average active user made about 15 transactions a month, nearly two to three times their use of a bank card, which he linked partly to the high take-up of contactless payments in the Czech market.
Smida’s point about the single click is still worth reading, but only together with the rest of what he described. Twisto set a credit limit for each user that could rise over time, checked a public register of overdue payments when assessing risk, and showed users in its app what they owed and when, with an option to defer. The checkout felt instant because the assessment had already been done, outside the checkout, before the shopper reached your payment step.
The new credit rules put the work where the shopper can see it
Directive (EU) 2023/2225 on consumer credit, dated 18 October 2023, brings third-party buy now, pay later schemes within its scope. Member States had to write it into national law by 20 November 2025 and must apply the rules from 20 November 2026. Several of its requirements land in or around the payment step. A third-party BNPL provider has to assess the shopper’s creditworthiness before the agreement is concluded. The shopper has to receive standard credit information in good time before being bound, presented in a way that takes account of the screen it is shown on. A default option such as a pre-ticked box does not count as the shopper’s agreement. Advertising for credit has to carry a clear and prominent warning that borrowing money costs money.
Not every country runs to the same calendar. In the Netherlands the date of effect follows by royal decree: the implementing bill passed the Tweede Kamer on 6 October 2026 and is now before the Eerste Kamer. If you sell in several EU countries, the date the new flow reaches your checkout may differ per market, and only your provider can tell you which flow runs where.
Design the first purchase, not the tenth
For a shopper who already has an approved arrangement with a provider, pay later may still take little more than a confirmation. The shopper who picks it in your checkout for the first time is a different case. Between your list of payment methods and the order confirmation, the rules call for a creditworthiness check, credit information before the shopper is bound and a clear, affirmative act of agreement. How those screens look is up to the provider. How much they surprise the shopper depends on what your checkout said first.
So describe the method honestly where it is chosen. A label that only says pay later suggests a payment method. A label that names the number of payments and the date of the first one, and says that the provider will check the application, tells the shopper what is about to happen. In my view a shopper who expects a short check is less likely to abandon it than one who expected a single click.
Do not preselect a pay-later method in your list. The directive states that agreement to a credit agreement cannot be inferred from silence or from a default option such as a pre-ticked box, and a credit product set as the default payment method sits uncomfortably close to that idea, even if the provider asks for confirmation later.
A refusal has to lead back into your checkout
A creditworthiness assessment can say no, and the shopper it refuses still wants the product. When an application is refused, the shopper should land back on your payment step with the basket, the address and the delivery choice intact, and a plain message that offers the other methods. A refusal that ends on the provider’s page, or that returns the shopper to an empty basket, turns a credit decision into a lost order.
After the order comes a message about the loan
In an online checkout the credit information typically reaches the shopper minutes, not a day, before they are bound. In that case the directive requires the provider to send a reminder, between one and seven days after the agreement is concluded, on paper or another durable medium, explaining that the shopper can withdraw from the credit agreement and how. A few days after ordering, your customer receives a message about withdrawing that they may not connect with the purchase. Some will contact you to ask whether it cancels their order. Agree with your provider now what the answer is, and give it to your customer service in two sentences.
Then run the test before the rules take effect in your markets. On a phone, place a pay-later order in your own checkout as a shopper who is new to the provider, and once more with a refused application in the provider’s test environment. Write down every screen between your payment list and the confirmation, and where the refused shopper ends up. Ask your provider at the same time whether the pay-later lines on your product pages and in the basket count as credit advertising, and what wording they need.
Sources: pymnts.com, eur-lex.europa.eu, officielebekendmakingen.nl and eerstekamer.nl
