Affordability is part of the creditworthiness decision
In a pay-in-instalments product, the immediate payment may look modest even when several payments will fall due in a short period. An affordability review should therefore examine the obligations attached to the actual credit agreement rather than just the size of the first instalment. Article 18 of Directive (EU) 2023/2225 requires an assessment of creditworthiness before conclusion of an agreement within its scope. That assessment is carried out in the consumer's interest and considers relevant financial and economic circumstances. The Directive does not create a freestanding BNPL affordability licence or a single numerical income test. National implementing law, supervisory guidance and the characteristics of the credit product determine the detailed operational approach.
Income, expenses and commitments need a reliable basis
Article 18 calls for relevant, accurate and proportionate financial and economic information. A creditor should consider income, expenses and existing financial commitments, including relevant living costs, rather than assuming that a small checkout balance is automatically repayable. The information requested should remain proportionate to the nature, duration, value and risks of the credit. Different instalment structures can produce different cash-flow pressures. A four-payment purchase with overlapping obligations is not equivalent to a single payment due after wages arrive. Credit providers need procedures for resolving contradictory information, documenting verification where needed and avoiding unnecessary collection of personal data. Special categories of personal data and social-network information are not a suitable shortcut to repayment-capacity analysis under the Directive's framework.
Credit history is not a substitute for repayment capacity
A credit record may contribute relevant information, but Article 18 states that an assessment must not be based exclusively on the consumer's credit history. A clean historical record does not by itself establish capacity to meet new obligations, while thin files may not give a complete picture of financial circumstances. A provider should define which data are relevant to the decision, assess their accuracy and understand the limitations of any scoring service. Rules should cover how simultaneous purchases, repeat use and unusually large baskets are treated where those facts are relevant to the agreement. Where a third-party merchant supplies customer information, the creditor remains responsible for satisfying the obligations that attach to its role under applicable national law.
A positive assessment is required for covered lending
CCD2 Article 18 frames creditworthiness as a protection against lending that cannot reasonably be repaid. Under its assessment rule, credit is to be made available only where the result indicates that the consumer's obligations are likely to be met as required by the agreement, subject to the Directive's specific terms and national implementation. A merchant's commercial conversion target is not an alternative regulatory threshold. Operational procedures should therefore prevent checkout confirmation from proceeding before the applicable assessment is completed. When information is insufficient, the process needs a documented path for requesting appropriate additional evidence or withholding an approval. It is important not to describe these CCD2 obligations as universally applicable already: the national measures implementing the Directive apply from 20 November 2026.
Automation requires additional consumer safeguards
BNPL decisions are often made at speed through automated systems. When a creditworthiness assessment involves automated processing of personal data, Article 18 provides specified consumer rights, including human intervention, a meaningful explanation, the opportunity to express a point of view and the ability to request review of the assessment and lending decision. Relevant data-protection requirements apply separately. A practical control is to keep versions of decision policies, input categories, automated outcome codes and the routes by which a consumer can request a human review. Teams must not promise that a review guarantees credit approval. Technical accuracy, escalation handling and sufficient staff authority matter as much as the appearance of a customer-service link.
Evidence and monitoring for affordability controls
A controlled affordability process records the product and jurisdiction, applicable legal basis, decision time, data categories, verification approach, policy version, result and any manual override. Quality assurance can sample approvals, rejections, complaints and repeat customer purchases to detect missing inputs or assumptions that no longer fit customer repayment patterns. Monitoring should distinguish routine model performance metrics from the statutory assessment itself. Any use of automated decisions, data sources or merchant-provided information should be reviewed when systems or product terms change. Retention periods should reflect applicable recordkeeping and privacy law rather than an invented universal CCD2 period. Firms operating in multiple EU countries need national-law mapping before describing a single assessment policy as compliant everywhere. Review testing should include transactions that are cancelled, returned, partially refunded or rescheduled, since changed payment obligations can alter what a consumer owes. The timing of the affordability assessment should match the moment a legally binding credit commitment is created. Firms should not treat a merchant's inventory or fraud screening as equivalent to checking a consumer's ability to repay. A record of a positive result should explain the rule and evidence used, not merely contain a vendor-generated pass flag. Where the product is structured as a revolving or reusable facility, the organisation should analyse relevant reassessment triggers and distinguish a new agreement from an amendment. Escalation procedures should address data errors, disputes about automated decisions and customer-reported financial difficulties. These are practical controls supporting the legal assessment, not an assertion that CCD2 expressly mandates each named document or workflow.
Frequently asked questions
Is affordability a separate CCD2 BNPL test?
CCD2 Article 18 provides creditworthiness requirements for in-scope agreements. Affordability is a practical component of evaluating repayment capacity, not a universally separate BNPL statutory test.
Is a credit score alone sufficient?
No. Article 18 prohibits an assessment based exclusively on credit history.
When does the CCD2 requirement apply?
Member States' CCD2 implementing measures are to apply from 20 November 2026; current national obligations may already apply.
Primary sources
Directive (EU) 2023/2225, Official Journal ↗European Commission consumer protection in financial services ↗Read the source in its current version. National implementing measures and product-specific applicability may require additional research.