Germany
Status
No steps taken to implement BNPL-specific legislation. Under the current legislation, service providers offering BNPL might be subject to payment service, financial service or banking regulation.
Is the country considering regulation?
No national BNPL-specific regulation is considered. Yet, the new EU Consumer Credit Directive (Directive (EU) 2023/2225 – “CCD2”) might have an impact on merchants and service providers when implemented in Germany.
Current state of regulation regarding BNPL?
There is currently no particular regulation of BNPL in Germany. However, the provision of BNPL can already be covered by other regulation, including regulation of payment services, factoring or lending. Therefore, it is important to structure the BNPL scheme properly to avoid any regulatory pitfalls.
The regulation depends on the structure of the relevant BNPL scheme. If, for example, the merchant offers BNPL itself (i.e. a deferment of the purchase price), it is possible that the merchant stays outside the perimeter of regulation. Depending on the offer, there might be consumer related obligations, in particular the following: The provision of a loan to consumers or the deferment of a purchase price might face also certain information obligations, the requirement of credit worthiness checks and other consumer credit obligations. Currently, there is an exemption from those obligations if the loan amount is below EUR 200 or the loan is repayable within 3 months and bears only low costs. The implementation of CCD2 will change this.
Any third party (BNPL service provider) providing services to a merchant to enable BNPL needs to review whether there is any regulatory implication. If the BNPL service provider, for example, grants a loan to the customer and the merchant is directly paid from the loan, it is very likely that a licence for credit business is required. On the other hand, if the merchant grands the payment deferment and the BNPL service provider acquires the payment claim, this might constitute factoring (what constitutes a regulated financial service in Germany).
Outline the proposals to change regulation?
No national proposal to change the current regulation has been discussed in Germany. For the changes from the CCD2, please see separate information.
