Retailers can offer customers 0% instalment finance without holding their own FCA credit licence by partnering with an FCA-authorised provider, using the interest-free exemption in Article 60F(2) of the Regulated Activities Order, or signing on as an Appointed Representative (AR) under an authorised principal firm. Most UK businesses choose the partner route because it needs no FCA application, no minimum capital, and can be live at checkout within days. The exemption route only covers agreements that are interest-free and settled in 12 or fewer instalments within 12 months, so it's narrower than the headline suggests. FCA rules bringing buy now pay later fully into regulation are tightening through 2026, which shrinks how far that exemption stretches for anyone relying on it long-term.
- You can offer finance without your own FCA licence by partnering with an authorised provider like PayItMonthly as an introducer or Appointed Representative.
- Article 60F(2) exempts interest-free credit repaid in 12 or fewer instalments within 12 months — the only fully unregulated route.
- Longer terms, interest, or higher-value agreements need an AR arrangement or full FCA authorisation.
- BNPL regulation is tightening through 2026, narrowing how far the exemption route can be stretched.
Why this matters
Offering finance without checking your regulatory status is one of the fastest ways a growing retailer picks up an FCA enforcement letter. Credit broking — introducing a customer to any finance agreement — is a regulated activity under the Consumer Credit Act, and doing it without a licence or an AR arrangement is a criminal offence, not a paperwork slip.
The upside: you don't need to become a regulated lender to offer finance at checkout in 2026. PayItMonthly and similar providers already hold the FCA permissions, so your business plugs in as an introducer rather than applying from scratch. Getting the structure right at the start avoids a rebuild later, especially once the 2026 BNPL rules take effect.
How to offer customer finance without an FCA credit licence
- Check whether your finance qualifies for the exemption. Interest-free, settled in 12 instalments or fewer within 12 months, no deferred interest — if it meets all three, Article 60F(2) may cover it with no FCA involvement.
- If it doesn't qualify, find an authorised principal. Longer terms, interest-bearing plans, or higher-value agreements need a provider that already holds FCA authorisation for consumer credit and credit broking.
- Sign up as an introducer or Appointed Representative. You operate under the principal's permissions rather than applying for your own licence — no FCA application fee, no capital requirement.
- Integrate the checkout option. Most providers can go live within days once contracts and eligibility checks are agreed, not months.
- Keep compliance records anyway. As an AR you're still bound by the principal's rules on disclosure and affordability checks, even without holding the licence yourself.
| Route | FCA status required | Typical setup time | Best for |
|---|---|---|---|
| Exempt interest-free plan (Art. 60F(2)) | None, if all conditions met | Immediate | Short plans, 12 instalments or fewer, no interest |
| Appointed Representative under a principal | No own licence — covered by the principal | Days to a few weeks | Retailers wanting longer or higher-value plans |
| Full FCA authorisation | Own credit broking/consumer credit licence | Months, plus ongoing compliance cost | Large groups running finance as a core product line |
The exemption route: 12 instalments or fewer, interest-free
Article 60F(2) exempts credit agreements that are interest-free, fee-free, and repayable in 12 or fewer instalments within a 12-month window. This is the only route that avoids FCA involvement entirely — but change one variable, add a processing fee, stretch to 18 months, and the exemption disappears. Retailers who built a checkout finance option around this rule in past years now need to confirm it still fits as the 2026 rulebook narrows what counts.
The Appointed Representative route: no licence, covered by a principal
Most retailers offering longer or larger finance plans in 2026 operate as an AR of an authorised firm. The principal — a provider such as PayItMonthly — holds the FCA permissions for consumer credit and credit broking; the retailer introduces customers under that umbrella. You never apply for a licence, but you inherit the principal's compliance obligations, including affordability checks and clear pre-contract disclosure.
The full authorisation route: your own FCA licence
Applying for your own FCA authorisation makes sense only if finance is central to the business model — a large retail group running its own in-house credit book, for example. It takes months, carries ongoing reporting and capital requirements, and duplicates work an authorised partner already does. For most single-brand or multi-location retailers, it's the wrong tool for the job.
Why licence requirements vary
- Number of instalments and repayment period — 12 or fewer within 12 months can qualify for exemption; anything longer can't.
- Whether interest or fees apply — one fee turns an exempt plan into a regulated one.
- Deal size — high-ticket finance draws closer FCA attention regardless of structure.
- B2C vs B2B — consumer credit rules are stricter than business-to-business trade account terms.
- Whether you're lending or introducing — introducing to a lender is credit broking; lending your own money is a different regulated activity entirely.
- The 2026 BNPL rulebook — new FCA rules are narrowing exemptions that retailers relied on in prior years.
Do I need FCA authorisation to offer 0% finance?
Not if you partner with an authorised provider or your finance meets the Article 60F(2) exemption — interest-free, 12 instalments or fewer, settled within 12 months. Step outside those conditions and you need either your own licence or an Appointed Representative arrangement with a firm that holds one.
What is the Article 60F(2) exemption exactly?
Article 60F(2) of the Regulated Activities Order exempts interest-free credit agreements repaid in 12 or fewer instalments within a 12-month period from FCA regulation. It was designed for simple retail instalment plans, not extended finance, and it's one of the areas the FCA's 2026 BNPL rules are tightening.
Can I lose the exemption if my finance terms change?
Yes — add interest, a fee, or extend past 12 instalments and the exemption stops applying immediately. Retailers who quietly change their instalment structure without checking this often find themselves offering regulated credit without realising it.
For most retailers, the practical answer isn't chasing an exemption that keeps shrinking — it's using a provider already built for it. PayItMonthly runs the checkout finance and the regulatory cover as one package, so the retailer handles the sale and PayItMonthly handles the credit broking permissions. Businesses vetting customers for a new finance scheme can check eligibility criteria before rollout rather than after the first declined application.
“If you're offering more than 12 interest-free instalments, you need an FCA-authorised partner or your own licence — there's no third option.”
Offer finance without applying for a licence
Add checkout finance under an existing FCA-authorised principal.
FAQ
Do I need an FCA licence to offer buy now pay later?
Not if you partner with an FCA-authorised provider as an introducer or Appointed Representative — you inherit their permissions. Only businesses lending their own money or running finance as a core product typically need their own licence.
What is the Article 60F(2) exemption?
It exempts interest-free credit repaid in 12 or fewer instalments within 12 months from FCA regulation. Add a fee, interest, or a longer term and the agreement stops qualifying.
Can a small business offer 0% finance legally in 2026?
Yes, by using the Article 60F(2) exemption for short interest-free plans or by becoming an Appointed Representative of an FCA-authorised provider. Both avoid the cost and time of a full FCA application.
What happens if I offer finance without proper authorisation?
Credit broking without a licence or an AR arrangement is a criminal offence under the Consumer Credit Act, and any resulting agreement can be unenforceable. It's a compliance risk, not a technicality.
How is an Appointed Representative different from holding an FCA licence?
An Appointed Representative operates under a principal firm's existing FCA permissions rather than applying for its own. The retailer still follows the principal's disclosure and affordability rules but skips the licence application entirely.
Is BNPL regulation changing in 2026?
Yes, FCA rules are tightening how BNPL and short-term instalment finance are regulated through 2026, narrowing exemptions retailers previously relied on. Businesses using the Article 60F(2) exemption should re-check their terms against the current rulebook.
Can I offer longer finance terms without an FCA licence?
Yes, through an Appointed Representative arrangement with an authorised principal — the exemption route only covers 12 instalments or fewer. Longer or interest-bearing plans always need authorised cover of some kind.
One last thing
The exemption most retailers assume covers them — interest-free, spread over a few months — has a hard edge at 12 instalments and 12 months. Cross it by even one payment cycle and the whole agreement becomes regulated credit overnight, which is why the AR route, not the exemption, is what most finance providers actually build their retail partnerships around in 2026.
