Israeli Capital Market Authority Regulates Buy Now Pay Later Loans to Protect Consumers

The Israeli Capital Market Authority has issued new regulations governing Buy Now Pay Later (BNPL) credit, a financing model that allows consumers to purchase products or services on credit at the point of sale without using their existing credit card or bank credit lines. BNPL loans are provided by third parties separate from the seller or service provider, and consumers repay the loan in installments. The new rules require lenders to clearly inform customers that the BNPL credit is a separate transaction and obtain explicit consent before proceeding. Additionally, a cancellation mechanism must be in place to void the credit agreement if the underlying purchase is canceled.

These regulations respond to cases where suppliers failed to deliver products or services, yet consumers were still obligated to repay BNPL loans because the credit was provided by a third party. A notable example is the 2024 collapse of American Laser, which left customers paying for unfinished aesthetic treatments through BNPL loans arranged by Blender, a BNPL provider.

BNPL credit has rapidly grown in Israel, with annual transaction volumes exceeding one billion shekels, excluding vehicle financing. The market is still nascent, dominated by two public companies: Blender, partly owned by the Aviv family and Bank Hapoalim through their joint venture Blender Pay, which had a BNPL loan portfolio of 190 million shekels in 2025; and Payment, controlled by Yaniv Gilor and Yohanan Guy, with a loan portfolio of 163 million shekels at the start of the year. Another player, Triya, exited the BNPL market in 2022.

The Capital Market Authority’s directive aligns with global trends seen in the UK, EU, and US, aiming to enhance transparency, strengthen consumer protections, and ensure responsible growth of the BNPL sector. The regulations adapt international principles to the specific characteristics of Israel’s non-bank credit market.