Clearpay, the UK arm of Block-owned Afterpay, has rolled out a new AI-powered credit limit system designed to offer more personalised borrowing thresholds for its 3.5 million British customers. The technology analyses transaction history, repayment patterns and broader financial indicators to set individual spending caps that fluctuate in real time. The company said the system reduces the risk of over-indebtedness while rewarding responsible users with higher limits over time.

The launch comes as the BNPL industry faces its most significant regulatory overhaul since the sector emerged in the UK market. Under proposals confirmed by the FCA in March, all BNPL providers will be required to carry out affordability assessments, provide clearer contract terms and ensure that customers have access to the Financial Ombudsman Service. Clearpay's UK managing director, Kirsty Morris, said the company welcomed the changes. "We have always believed that proportionate regulation will strengthen consumer trust and level the playing field," she told Finextra.

Analysts at Citi estimated that compliance costs for mid-sized BNPL operators could reach £15 million annually, potentially triggering consolidation in the sector. Smaller players such as Laybuy, which exited the UK market in 2023, have already demonstrated the financial pressures involved. Industry body the Consumer Credit Trade Association noted that the regulatory timetable remained tight, with firms expected to be fully compliant by mid-2026.