The State of LayBy 2026: how BNPL's reckoning is reviving pay-first payments

For a decade, "pay over time" online meant one thing: buy now, pay later. Get the goods today, owe the balance tomorrow. In 2026 that consensus is cracking. Regulators are bringing BNPL inside the credit tent, the consumer-harm evidence has piled up, and merchants are quietly asking a different question — not "how do we let people borrow to buy?" but "how do we let people pay for things they can actually afford?"

That question has an old answer: layby. The customer reserves an item, pays it off over time, and collects it once it's paid for. No debt, no interest, no credit check. This is our read of where the market is heading in 2026, and why the pay-first model is having a moment.

1. BNPL is being regulated like the credit product it is

The defining shift of 2025–26 is regulatory. Buy now, pay later spent years in a gap between "payment" and "credit" — and that gap is closing.

• Australia. From 10 June 2025, BNPL contracts are regulated as credit under the National Consumer Credit Protection Act, and providers must hold an Australian Credit Licence and run responsible-lending checks (ASIC).
• United Kingdom. The government and FCA have confirmed BNPL will be brought into FCA regulation, with affordability checks and access to the Financial Ombudsman (GOV.UK).
• United States. The CFPB moved to treat larger BNPL providers more like credit-card issuers, with dispute and refund obligations (CFPB).

The direction of travel is the same everywhere: if a product lends people money to buy, it gets regulated as lending. For merchants, that means the compliance and reputational questions attached to BNPL are only growing.

2. The debt cost is now well documented

The case for treating BNPL as credit rests on how it affects people. Australia's own regulator put numbers to it: in its review of the industry, ASIC found that around one in five users had missed or were late on a payment, and that some had cut back on essentials — including meals — or taken on additional debt to make their repayments on time (ASIC, Report 672).

That's the quiet downside of "get it now": when payments are detached from whether you can afford the thing, some shoppers end up underwater on purchases they've already taken home. BNPL didn't invent overspending, but the take-now-pay-later shape makes it easy.

Layby inverts the risk. Because the customer pays before they collect, there's no balance to fall behind on and nothing to repossess. The worst case is a cancelled plan and a refund — not a debt.

3. Merchants are rethinking what they put at checkout

Merchants feel this from two directions. First, cost: BNPL merchant fees in Australia commonly run 4–6% of each sale (CreditorWatch) — several times the cost of accepting a card (RBA). Second, brand: as the debt narrative around BNPL hardens, more stores would rather not be the checkout that nudged a customer into borrowing.

The result is a shift back toward what we'd call pay-first pathways — layby, deposits and structured payment plans — where the store offers flexibility without underwriting a loan. It's the same instinct that made layby a fixture of retail for generations, brought up to date for online stores. (If the words trip you up, layby and layaway are the same thing — just different countries' vocabulary.)

4. "Pay-first" is not a step backwards

The old knock on layby was friction: paper cards, manual tracking, a trip back to the shop. That's a software problem, and software has solved it. Modern layby runs the deposit, the schedule, the reminders and the collection automatically, and releases the order the moment the final payment clears.

The genuine layby options for ecommerce are a small but growing field — we keep an honest list of layby payment providers, including how they differ from the BNPL services often mislabelled as layby. The common thread among the real ones: the customer pays before they collect, and nobody takes on debt.

What this means for 2026

Our take: the regulatory squeeze on BNPL isn't the end of flexible payments — it's a reset toward flexible payments that don't create debt. Expect more merchants to offer a pay-first option alongside (or instead of) BNPL, and more shoppers to choose it, especially on higher-value purchases where committing and paying down beats borrowing.

Flexilay is built for that world. Customers reserve an order and pay it off on a schedule that suits them; you keep control of the goods until it's paid; and every payment runs through your own Stripe account, so you're never a lender and never holding someone else's debt. If you want the mechanics, here's how Flexilay works — and why Flexilay isn't BNPL.

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A note on this report: the figures above are drawn from public regulatory and industry sources, linked inline. As Flexilay's own dataset grows, we'll fold anonymised platform trends into future editions of the State of LayBy.