A South African or Egyptian instalment-payment business plans to offer credit at UK checkout. The first decision is who will legally lend, own the credit rights and deal with customers when payments or purchases go wrong.
Licentium’s market-entry engagement turns that decision into a permission map, contract requirements, an operating responsibility schedule and documented launch conditions. It covers buy now, pay later (BNPL) regulation and the wider consumer credit issues that change the proposed structure.
The launch decision
Start by testing an authorised lending partnership where the company can supply technology and distribution while the partner genuinely undertakes the lender’s role. Choose an own-lender route where the business needs to enter the credit agreements itself and can satisfy the applicable permission and operating requirements. A merchant technology role is viable only within the activities that the company actually performs.
The engagement identifies:
- Which activities each entity may perform and what permission or exclusion supports them.
- Which customer documents, commercial contracts and operating controls the model needs.
- What must be completed before launch, including conditions that require a narrower product or postponement.
Since 15 July 2026, specified third-party, interest-free deferred payment credit (DPC) has been regulated in the UK. The remaining exemptions depend on the agreement and its parties. Calling a product “pay in three” does not settle its legal classification. (Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, arts 60B and 60F(2), (7A)–(7C).)
Define the product and each party’s role
The starting scope is an unsecured, fixed-sum checkout product, free of interest and other credit charges, repayable in no more than 12 payments within 12 months. We check whether it meets the regulated deferred payment credit definition, including the lender–supplier relationship and statutory exceptions. Interest-bearing instalments, revolving credit, hire purchase, land security and business lending require separate classification. (Regulated Activities Order 2001, art 60F.)
The permission map follows the contracts, money and customer journey. It identifies the lender, merchant, broker, debt owner, servicer and technology provider. Acquiring lender rights, collecting debts or administering agreements can raise different questions from supplying software. Applicable exclusions must be tested before assigning permissions. (Regulated Activities Order 2001, arts 39F–39H and 60B(2), 60I–60J.)
For the three principal structures, the work is different.
An own-lender operation
We identify the permissions required for the proposed activities and the evidence needed to support an application. The entity entering regulated agreements must have an effective authorisation or a properly established exemption before it begins that business in the UK. A foreign credit licence does not supply UK permission. (Financial Services and Markets Act 2000, ss 19 and 39.)
Temporary permission is not an entry route for a newly established lender. The DPC scheme depended on qualifying pre-existing business and timely notification; its registration window closed on 1 July 2026. Existing firms must also distinguish temporary permission from the statutory treatment of permissions they already held. (SI 2025/859, arts 6A, 8–10 and 12, as amended by SI 2025/1154; FCA DPC Temporary Permissions Regime Directions, 1 April 2026, para C.)
An authorised lending partner
We check the proposed lender’s actual permissions and restrictions, then allocate origination, decisions, funding, servicing and customer communications.
The partner agreement must give the lender the information, oversight and intervention rights needed for its own duties. Outsourcing a task or obtaining a merchant indemnity does not transfer those duties to the platform. (FCA Handbook, CONC 1.2.2R.)
Our analysis of UK launch choices for a South African BNPL business explains the structural options. This engagement develops the selected option into documents and operating requirements.
A merchant technology role
Genuine supplier-provided credit can remain exempt if the statutory conditions are met. The rules also address arrangements in which an independent lender buys and resells goods to take the supplier’s place. A contractual label cannot establish the exemption. (Regulated Activities Order 2001, art 60F(2), (7A).)
Broking relating to regulated DPC is excluded from the credit-broking activity. That exclusion does not cover every credit product or remove financial-promotion controls. Merchant pages, checkout prompts and referral campaigns therefore need their own review. (Regulated Activities Order 2001, art 36FB; Financial Services and Markets Act 2000, s 21; Financial Promotion Order 2005, art 15(1A)(ba).)
Four deliverables, in implementation order
1. Credit business model and permission map
The first output records the proposed entities, product terms, territorial connections and activities. It distinguishes regulated activities, supported exclusions and points that depend on missing evidence.
The recommendation states which structure can proceed, who must hold the relevant permission and which features must change. If the arrangement also involves payment services or e-money, we scope that work alongside the credit analysis through Payment & E-Money Licensing.
2. Partner agreement and customer document requirements
The contract work covers lender–platform and merchant arrangements, including decision authority, settlement, returns, disputed purchases, redress, information access, audit, subcontracting and exit.
Customer documents are matched to the product. Regulated DPC has specific pre-contract product-information rules and durable-medium requirements; an existing overseas checkout disclosure or generic credit template needs substantive review. (FCA Handbook, CONC 4.2A.3R–4.2A.8R.)
The refund process distinguishes contractual returns from statutory claims. For qualifying debtor–creditor–supplier agreements, section 75 can make the lender liable for supplier breach or misrepresentation where an item’s cash price exceeds £100 and does not exceed £30,000. Inter-business recovery arrangements must preserve the borrower’s applicable rights. (Consumer Credit Act 1974, ss 75(1)–(3) and 173.)
The output is a document schedule with drafting requirements, dependencies and responsibility for each item, together with the agreements and customer wording included in the agreed mandate.
3. Affordability, complaints and arrears responsibility schedule
The schedule assigns each operating task, decision owner, escalation route and evidence record.
It covers proportionate creditworthiness assessment before lending, including affordability risk; treatment of repeat borrowing; missed-payment communications; support for customers in or approaching arrears; refunds; complaints; and Financial Ombudsman Service referrals where applicable. Small instalments do not justify treating affordability as irrelevant. (FCA Handbook, CONC 5.2A.4R–5.2A.12R, 7.3.4R and 7.20; DISP 1.6.)
We translate those requirements into instructions for the lender, merchant and service providers. The contracts should let the responsible firm obtain records, correct failures and continue customer support when a partner relationship ends.
4. Market-specific launch conditions
The final output combines the legal dependencies with implementation evidence: effective permissions, signed contracts, approved customer information, assigned complaint and arrears handling, and completion of the agreed customer-journey checks.
For firms within the Consumer Duty, the work includes fair-value evidence, customer understanding and support for vulnerable customers. The applicable duties depend on each regulated firm’s role and influence; an unregulated software supplier does not acquire every FCA obligation merely by joining the project. (FCA Handbook, PRIN 2A.1, 2A.4.2R–2A.4.3R and 2A.5.3R–2A.5.10R.)
Automated decisions require a separate assessment of legal basis, data use and meaningful human involvement. The UK rules require safeguards for significant solely automated decisions, including information, representations, human intervention and challenge. Special-category data requires additional analysis. EU rules must be assessed separately. (UK GDPR, arts 22A–22C, as inserted by Data (Use and Access) Act 2025, s 80; EU GDPR, art 22.)
Review both ends of the expansion
For a South African business, we assess whether the proposed agreements fall within the National Credit Act’s territorial and product scope. Outward funding, guarantees and intellectual-property licensing also need the applicable exchange-control route checked. Some arrangements can proceed through an authorised dealer; others need further approval. (National Credit Act 34 of 2005, s 4; SARB Currency and Exchanges Manual for Authorised Dealers, 8 October 2026, B.2(A) and B.2(C).)
For an Egyptian business, the review examines the licensed entity’s permitted activities, regulated use of technology and outsourcing, and foreign-currency arrangements. The required steps depend on which entity performs each function. They do not amount to a general prohibition on overseas expansion. (Consumer Finance Law 18/2020, arts 8–9; Law 5/2022, arts 5–6; Central Bank and Banking System Law 194/2020, art 212.)
Our analysis of Saudi BNPL licence choices for an Egyptian fintech addresses a different destination market. Its Saudi conclusions should not be carried into a UK launch.
An EU mandate begins with named Member States. The second Consumer Credit Directive (CCD2) requires national measures to apply from 20 November 2026, but product exclusions and national creditor-admission rules still require country-specific work. UK authorisation provides no EU passport, and CCD2 does not create a general non-bank lending passport. (Directive (EU) 2023/2225, arts 2, 37 and 48.)
Information needed to scope the work
Please provide:
- The group structure, proposed contracting entities, target countries and existing permissions.
- Product terms, prices, fees, repayment periods, customer categories and merchant sectors.
- Checkout screens, advertisements, customer terms and the proposed credit-decision process.
- Partner contracts and a diagram showing funding, settlement, debt ownership and servicing.
- Data flows, scoring inputs, outsourcing arrangements and proposed complaints, arrears and refund procedures.
The base engagement is legal structuring and implementation documentation. A licence application, additional country opinion, tax advice, technical testing or dispute representation requires an expressly agreed scope. Deliverables do not themselves grant permission or establish that an untested system complies.
Questions before commissioning
Can we launch while an FCA application is pending?
An application alone does not authorise regulated lending. The launch plan must identify an effective permission, a valid exemption or a different lawful allocation of activities before lending starts. (Financial Services and Markets Act 2000, s 19.)
Can we rely on a partner’s licence?
Only for activities the arrangement lawfully places with that partner. We check who contracts with the borrower and who holds or exercises credit rights. Branding, funding and a services agreement cannot substitute for that analysis. (Regulated Activities Order 2001, art 60B.)
Does interest-free credit avoid regulation?
No. Qualifying third-party DPC has been regulated since 15 July 2026. Genuine merchant credit and the specific statutory exceptions still need to be assessed against their conditions. (Regulated Activities Order 2001, art 60F.)
Can our existing e-money or payment institution structure handle the launch?
We examine the precise permissions and any applicable credit conditions. Payment services, e-money issuance and consumer lending require distinct analysis; the credit model should be resolved before the documents are adapted.
Can we include several EU countries?
Yes, as separately scoped national workstreams. Each needs its own product classification, creditor-admission analysis and implementation review. The UK document pack is a starting source of business information, not evidence of EU market access. (Directive (EU) 2023/2225, arts 2 and 37.)
Assess a BNPL launch structure
Contact Licentium with the proposed product, contracting entities and target markets to scope the permission map, documents and launch conditions.