Hungary
Status
No steps taken to implement legislation.
Is the country considering regulation?
No.
Current state of regulation regarding BNPL?
According to the National Bank of Hungary’s (the "NBH") opinion, the BNPL services currently provided shall be considered as deferred payments, commercial loans under Hungarian law.Pursuant to the Hungarian Credit Institutions Act deferred payment facilities or advances given to each other by natural persons or companies engaged under contract for the supply of goods and/or services (commercial loan), except where such transactions are concluded by financial institutions, shall not be recognized as loan operations. Accordingly, if the BNPL service is provided as a commercial loan by a non-financial institution, it does not fall within the scope of financial services and is therefore currently not subject to supervision by the NBH.
The other concept, according to the NBH's opinion, is that if BNPL services are provided through factoring (i.e., the BNPL service providers purchase the claims of the commercial loan providers vis-á-vis the customers and they collect them from the customers), that qualifies as a financial service and, therefore, the BNPL service providers must be licensed to provide such services. However, we note that it is not considered as loan operation if the vendor decides to sell its claims vis-á-vis the customers.
The NBH issued its ‘FINTECH AND DIGITALIZATION REPORT’ in June 2022, in which the regulatory environment for BNPL services was already examined. This report criticised the fact that the consumer protection provisions of the Consumer Credit Directive do not apply to EU BNPL service providers. Given that these providers do not voluntarily subject themselves to consumer protection requirements, several problems may arise despite their regulated activities. However, a domestic regulatory approach is not discussed in this report, beyond the fact that BNPL is becoming a widespread solution, and regulatory responses will be necessary. As mentioned above, this has not yet taken place.
Outline the proposals to change regulation?
None.
