What you as a merchant need to know about the new requirements under the legislation implementing the Consumer Credit Directive
Table of Contents
From 20 November 2026, the German Act implementing Consumer Credit Directive (EU) 2023/2225 will enter into force. The legislative changes affect the entire consumer credit ecosystem. They focus on practically all situations in which consumers do not immediately pay the full price for goods or services. BaFin has now specified the requirements that must be observed in relation to so-called point-of-sale financing. A number of things will change for merchants that offer customers general consumer credit agreements (which include instalment purchases and, in some cases, purchases on invoice). The most important questions at a glance:
1. What is a general consumer credit agreement?
In future, this will cover practically all forms of point-of-sale financing, in particular traditional instalment purchases, purchases on invoice and 0% financing – in other words, everything that is often referred to as “buy now, pay later” offers.
No credit agreement exists if you, as a merchant, yourself grant your customers, for at least “one legal second”, an interest-free payment period of no more than 50 days and only limited charges are incurred in the event of late payment.
For large companies (i.e. if you are larger than an SME) selling goods through e-commerce, this period is reduced to 14 days.
Important: As soon as a third party completely takes over the general consumer credit agreement, the exemption for large companies no longer applies either. In BaFin’s view, it is not sufficient for the third party merely to take assignment of the claim for payment against the consumer. Rather, the entire contractual relationship must be transferred to the third party by way of a transfer of contract. However, this may be treated differently in other EU countries.
2. I offer instalment purchases/purchases on invoice – am I now a creditor?
You are considered a creditor within the meaning of the German Point-of-Sale Financing Supervision Act (“AbsFinAG”) as soon as you regularly, and in the course of your business, grant consumers general consumer credit agreements or make a firm commitment to grant them such credit. It does not matter whether the funds have already been advanced or whether you have merely promised to provide them. The AbsFinAG primarily covers creditors that are not banks or other financial institutions.
Exemption from registration: Merchants that, as suppliers of goods or providers of services, exclusively grant interest-free deferred payments “in a subordinate function” with only limited default charges are exempt, but only if they are micro-enterprises or SMEs within the meaning of EU Recommendation 2003/361/EC.
3. What does it mean for me to be a creditor within the meaning of the AbsFinAG?
Anyone wishing to operate as a creditor must register with the German Federal Financial Supervisory Authority (“BaFin”), conduct a detailed creditworthiness assessment and comply with requirements concerning employee remuneration (see question 5 below). Please note: from summer 2027, additional anti-money laundering obligations may apply.
4. What applies if I cooperate with a bank or BNPL provider?
A typical arrangement in the retail sector is as follows: you enter into a framework agreement with a bank or BNPL provider. You contractually agree that your deferred payment claim against the customer will be assigned to the cooperation partner after the contract has been concluded. The terms of the instalment purchase (term, interest, withdrawal information) are specified by the partner. This arrangement is referred to as point-of-sale financing with assignment of receivables.
Legal consequence for you as a merchant: In this arrangement, responsibility for fulfilling all statutory obligations associated with granting the general consumer credit agreement lies with the relevant partner and not with you as the merchant. In this case, you are not a creditor within the meaning of the AbsFinAG and therefore do not require BaFin registration.
However: In fulfilment of its own obligations, the partner must notify BaFin of you as a merchant before the first assignment of a receivable.
5. What obligations must I fulfil as a creditor when granting credit?
The precise scope of all obligations applying to a creditor depends on the details and covers virtually every stage from the initiation of the contract through to a consumer’s payment default.
The obligations can broadly be divided into regulatory obligations under, for example, the Point-of-Sale Financing Supervision Act or the Price Indication Ordinance, and civil-law requirements under, for example, the German Civil Code (BGB), which the specific credit agreement must satisfy.
Pre-contractual obligations:
You must provide the customer, in good time, with pre-contractual information on paper or another durable medium of their choice and provide adequate explanations of the essential features of the contract and the consequences of late payment or default. If an offer or its terms are based on automated processing of personal data, the borrower must be informed accordingly.
Conclusion of the contract:
The contract must be concluded in text form. The contract may not be concluded using pre-ticked boxes. The customer must actively consent and must first be informed about the content of the agreement.
Ongoing obligations and forbearance in the event of payment difficulties:
In the event of payment difficulties, you may be required to refer the borrower to debt advisory services and, before initiating enforcement proceedings, exercise reasonable forbearance where appropriate.
Creditworthiness assessment:
In future, a stricter and detailed assessment of the borrower’s creditworthiness will be required. You may only conclude the general consumer credit agreement if repayment is likely. Depending on the individual circumstances, the assessment must be based on relevant and accurate information concerning income, expenditure and other financial circumstances, where appropriate using external sources of information. Certain information must not influence the decision, including health data or data from social networks.
Employee remuneration:
The remuneration of employees who assess consumers’ creditworthiness must, in particular, not be linked to sales targets.
6. By when do I need to deal with all of this?
The rules will apply from 20 November 2026.
The civil-law obligations must be complied with from that date.
For creditors subject to the AbsFinAG, the following applies: creditors already carrying on such activities may continue to do so for up to twelve months after the legislation enters into force without registration. However, an application for registration should be submitted in good time within this period.
7. What are the consequences of non-compliance?
In addition to substantial fines (up to EUR 500,000 for unauthorised lending activities), there may also be civil-law consequences, such as a reduction in interest in the event of an incomplete creditworthiness assessment.
BaFin may also publish measures and decisions imposing fines on its website.
8. What is the next step?
Whether and to what extent your company is affected depends on many details:
Are you an SME? Is a bank/financial institution involved in granting the credit? What criteria do you use to conduct the creditworthiness assessment? Are your contractual documentation and advertising already CCD II-ready?
We would be pleased to assist you in adapting your business model to the new requirements in a legally compliant manner.
