Consumer Credit Directive is a trust boost for BNPL

2022 was a year of upheavals that will definitely be remembered. The year also brought a decisive turn for the "Buy Now Pay Later" sector (BNPL), which will clearly shape the business with new, digital forms of financing in e-commerce in the years to come. We are of course talking about the upcoming consumer credit directive (Directive on Consumer Credits, CCD for short), which the EU Parliament and the responsible ministers of the EU states have agreed on in the Council.


The aim of the directive is that in the future the same competitive conditions should apply to all credit providers, both online and offline. This also applies to BNPL, as follows:

  • Protection rules for loans under 200 euros
  • Marketing: There will be more prominent and detailed information on the conditions for online quick loans. The EU wants this information to be designed in a similar way to warnings on cigarette packs in order to draw consumers' attention to the risks
  • Stricter credit checks: The aim of the assessment is to check whether the consumer is able to meet his/her obligations
  • Right of withdrawal: The right to withdraw from a credit agreement without giving a reason within 14 days should apply

So far, regulations in the EU have applied for consumer credits between 200 and 75,000. They were introduced in 2008. They oblige lenders to provide information so borrowers can compare offers and make informed decisions. Consumers also have 14 days to withdraw from a loan agreement and they can repay the loan early, reducing costs. Under the new rules, small loans under 200 euros, which are often used for online shopping, are also to be regulated more strictly. The upper limit has been increased to 100,000 euros.


“The cost-of-living crisis triggered by Russia's war against Ukraine has left millions of consumers in financial difficulties. More and more Europeans are taking out loans to finance their needs,” said the EU Commissioner for Values ​​and Transparency, Věra Jourová. "It is therefore crucial that consumers are adequately protected against unfair practices and that they benefit from the highest level of security when taking out a loan, both online and offline."

For the purpose of consumer protection

For BNPL technology providers such as Credi2, the EU push for new rules for online loans is viewed very positively. "Current economic developments will significantly strengthen the values ​​of banks and issuers, as well as the concept of "responsible lending" and good relationships with retailers," says Credi2 Co-CEO Christian C. Waldheim. As a technology partner of Visa, Deutsche Bank, Volkswagen Financial Services or Raiffeisenbank International (RBI), it is a matter of course for Credi2 to meet the highest regulatory requirements - always in the interest of protecting consumers.

Since this is not a regulation but a directive, the EU member states themselves will decide whether to apply the consumer credit rules to specific types of credit, such as small loans of up to 200 euros, interest-free loans or loans that can be paid within three months and with low interest rates. The preliminary political agreement reached by the EU Parliament's negotiating team now has to be approved by the Committee on the Internal Market and Consumer Protection (IMCO) followed by the plenary of the EU Parliament. The Council also has yet to approve the deal before it can enter into force, which is considered a formality.