“Buy Now, Pay Later” May Be Governed By European Consumer Credit Directive

Online payment traffic cannot be imagined anymore without “Buy Now, Pay Later” (BNPL). The option to pay afterwards is popular among consumers. In 2024, the Subdistrict Court asked the Supreme Court when BNPL services could fall under the European Consumer Credit Directive (also known as ‘CCD1’). With reference to those questions, the Supreme Court in turn asked questions to the European Court of Justice. On 27 June 2025, this clarity finally appeared; the Supreme Court held that under specific circumstances, BNPL services qualify as credit, and that these services are therefore governed by the Directive and the obligations arising from it. Examples are obligations to provide information, credit check and cost transparency. 

The Supreme Court confirmed that having to pay interest or collection costs if there are payment arrears does not count when assessing whether a credit is “interest-free”; such credits are not within the scope of the Directive. Such circumstances are not immediately relevant to assess whether the BNPL provider is governed by the Directive. However, if the provider’s money-making model is based precisely on the structural collection of those costs, for example because consumers are expected to pay late often, these costs do count. In that case the Directive does apply, as there is no credit without costs or with only insignificant costs. 

If the Directive applies (and no other exceptions are applicable), the same rules will apply as for traditional lenders. This entails the following obligations, inter alia:

• Licensing requirement: In principle, lenders need a license of the AFM to be allowed to provide credits.
• Pre-contractual duty to provide information: Consumers must be informed of the terms of the credit ‘in good time’ before concluding the credit agreement. It must be assessed in light of the circumstances of the case whether ‘good time’ was given. In its judgment of 27 June 2025, the Supreme Court considered that if a consumer decides at once to buy a product and almost immediately takes out a credit, this does not automatically mean that the information was not provided in good time in advance.
• Credit check: The provider has to check in advance whether the consumer can bear the credit.
• Advertising and marketing: Specific rules and warning texts apply for the advertising and marketing of credits.
• Costs: Specific rules apply as to which costs for credits can be charged and how high the loan charges can be.
• BKR: Lenders must be affiliated to the BKR [the Dutch Credit Registration Office] for the registration of specific credits.
• KiFID: Lenders must have their own complaints procedure and must join the disputes committee KiFID [Financial Services Complaints Tribunal]

Besides the obligations from the Directive, lenders also have to comply with the demands of the Act to Prevent Money Laundering and Financing of Terrorism (“Wwft”), which means that they must have a know-your-customer (“KYC”) process in place and must report any unusual transactions to the FIU [Financial Intelligence Unit Netherlands].

The Supreme Court emphasized that the courts must examine of their own motion whether the lender has reviewed the creditworthiness of the consumer, even if the consumer does not rely on this. In their examination the courts have to consider all circumstances around the concluding of the agreement. On the other hand, the Supreme Court held that the courts are not obliged to examine of their own motion whether the lender should not have entered into the credit agreement on the basis of the applicable rules, because this rule does not follow from the CCD1.

The CCD1 has been revised. In the autumn of 2026 the new Directive, known as the CCD2, will enter into effect in the Netherlands. Its purpose is to protect consumers better against the risks of consumer credit, including BNPL services.

Remarkably, the Netherlands chooses to implement the Directive strictly. They do not use the optional exceptions that offer room to BNPL providers in other Member States, such as a mitigated regime for credits below 200 Euro. This means that BNPL providers in the Netherlands are about to become subject to a strict regime.

What will change?

• No exceptions for small credits: The exemption for credits with a lower limit of 200 Euro will lapse. Small credits will also fall within the scope of the CCD2. This designates BNPL providers expressly as lenders, unless a different exception applies.
• Diminished pre-contractual disclosure obligation: For a BNPL credit that is provided free of interest or other costs, is below 200 Euro, or must be repaid within three months while only insignificant charges are payable, Member States can choose to mitigate a few obligations, such as pre-contractual disclosure obligations. The Dutch legislator has chosen to apply only part of this mitigated regime to credits free of interest or other costs, or with a term of 3 months and only insignificant charges.
• Age verification: BNPL cannot be offered to minors anymore. Providers have to verify the age of consumers before providing a credit.
• Application of the rules ex proprio motu: The courts will probably be obliged to examine of their own motion whether the lender should not have entered into the credit agreement with the consumer on the basis of its test of creditworthiness. The reason for this obligation is that, as opposed to the judgment of the Supreme Court, this rule arises from CCD2.

The Dutch implementation of the CCD2 will have to enter into effect in the autumn of 2026.

The judgment shows that there are circumstances that cause BNPL service providers to offer credits and to adhere to obligations from the Directive. It will now first be up to the Subdistrict Court to judge whether in this specific case with Afterpay credit is being provided that is within the scope of CCD1.   

Do you have questions about the application of this judgment or the new Directive with regard to your practice or services? Please feel free to contact our team.