The Bank of Russia is considering the possibility of introducing a limit on the amount of free installments provided by BNPL (buy now, pay later) services, it reported RBC regulator representative. The Bank of Russia plans to develop amendments to the legislation regulating the purchase of goods and services using BNPL services by June 1.
According to a representative of the Central Bank, it is assumed that the installment market in Russia will operate according to two models – paid and free. “Paid installments are essentially a consumer loan, and the regulation here should not differ from the regulation in consumer lending, otherwise arbitrage will arise. Professional lenders should provide such installment plans,” he said.
As part of the free installment model, additional regulation may be introduced in the form of a limit on the amount of purchases, the Central Bank said. Only specialized operators will be able to provide free installment plans. “In this case, requirements will be established for them to ensure the protection of consumer rights. And the creation of a special register of such operators is being considered,” said a representative of the regulator. He also allowed the introduction of a requirement to take into account in credit histories obligations arising from the use of installment services exceeding a certain limit.
BNPL is a service that allows you to pay for purchases in installments. As a rule, the amount is divided into four equal parts, which are paid every two weeks. No interest is charged on BNPL payments. In Russia, the first BNPL services appeared in 2021. According to Frank RG, in 2022, using BNPL services, Russians bought goods and services worth more than 42 billion rubles. Last year’s results are not yet known. But analysts suggest that sales could reach 100–120 billion rubles.