Consumer finance is changing – how can cycling retailers find the right partner?
Posted on in Business News , Cycles News
Consumer finance is entering a new phase in the UK, shaped by tighter regulation, evolving customer expectations, and increased scrutiny on outcomes. For retailers, particularly in specialist sectors like cycling, understanding these changes is essential when choosing a finance partner that supports both compliance and commercial growth. We’ve explained the key things you need to know as an independent cycling retailer, with help from our partner V12 Finance.
Consumer finance – a brief explainer
Consumer finance refers to financial products that allow individuals to spread the cost of purchases over time, rather than paying the full amount upfront. Within a retail context, it is typically offered at the point of sale, either online or in store, giving customers greater flexibility and helping them manage larger or unexpected purchases. For retailers, it supports affordability, improves conversion, and can increase average order values by making higher-ticket items more accessible.
The types of consumer finance most relevant to retailers are those embedded directly into the shopping journey. Point of sale (POS) finance enables customers to apply for finance during checkout, often with fixed monthly repayments over an agreed term. Buy Now Pay Later (BNPL) offers shorter-term instalment options, often interest-free, allowing customers to defer or split payments.
A changing regulatory landscape
From 15 July 2026, BNPL products will move fully into the regulated consumer credit space. This brings them under the Financial Conduct Authority’s (FCA) consumer credit regime, aligning them more closely with traditional finance products.
The changes are significant. Providers will need to be authorised by the FCA and carry out affordability checks on every transaction, including those under £50. Customers must receive clear, upfront information about their agreement – what they will pay, when payments are due, and what happens if they miss one.
There is also a stronger emphasis on customer support. If a payment is missed, customers must be notified immediately, with clear guidance on what they owe and how to resolve the situation. Firms are expected to take a more supportive approach, including offering forbearance where appropriate and directing customers to free debt advice services.
Two additional protections bring BNPL closer to credit cards. Section 75 protection will apply to purchases between £100 and £30,000, making providers jointly liable with retailers if something goes wrong. Customers will also gain access to the Financial Ombudsman Service for complaints, giving them a formal route to escalate disputes.
Taken together, these changes raise the bar for transparency, accountability, and customer outcomes. They also place greater responsibility on retailers to ensure their finance partner can meet these standards.
What this means for retailers
Buy Now Pay Later (BNPL) remains a powerful tool. It enables customers to spread the cost of purchases over shorter periods, often interest-free, helping to reduce upfront cost barriers and support conversion. For many shoppers, particularly on higher-value items, BNPL can be the deciding factor in completing a purchase.
However, as regulation tightens, the quality of execution becomes more important. Any friction in the application process, lack of clarity in communication, or poor post-sale support can quickly undermine both compliance and customer trust.
Retailers therefore need to look beyond simply offering BNPL. The focus should be on how it is delivered – from clear, transparent customer journeys and real-time decisioning to strong customer support and full alignment with evolving regulatory requirements.
Why this matters for bike shops
Cycling is a category where finance plays a particularly important role. Purchases are often high value, whether it’s an e-bike, a performance road bike, or a full equipment upgrade. Customers are typically engaged and informed, but also expect flexibility in how they pay.
The sector also has its own dynamics: seasonal demand, fast-moving product cycles, and a mix of planned and urgent purchases. A rider may carefully research a £3,000 bike, but also need immediate access to finance for an unexpected repair or replacement.
This creates a clear need for finance solutions that are both robust and responsive. Customers want quick decisions, transparent terms, and a smooth journey across both online and in-store environments. Retailers, in turn, need confidence that their finance partner can support these expectations without introducing risk.
Defining the right finance partner
In this environment, the “ideal” retail finance partner is no longer just about offering credit. It is about delivering a complete, compliant, and customer-focused experience.
Key characteristics include:
- Frictionless customer journeys: Fast, intuitive applications that minimise drop-off and reduce rework
- Strong compliance culture: Proactive alignment with FCA requirements and a clear focus on customer outcomes
- Reliable decisioning: Quick, accurate lending decisions that support conversion without compromising risk
- Consistent omnichannel experience: A seamless journey whether customers are shopping online or in store
- Post-sale support: Accessible, effective help that maintains trust beyond the initial transaction
These elements are increasingly non-negotiable as regulation tightens and customer expectations rise.
A sector-specific approach
For cycling retailers, there is additional value in working with a partner that understands the nuances of the industry. This includes how and when customers buy, the importance of brand trust within cycling communities, and the operational realities of running a specialist retail business.
A finance provider with deep sector experience can better support these needs – from aligning with seasonal peaks to enabling smooth transactions on higher-value baskets.
Equally important is the ability to help retailers attract new customers. As more consumers actively seek out retailers offering finance, visibility becomes a competitive advantage. Tools that connect motivated shoppers with retailers – particularly those already intending to use finance – can play a meaningful role in driving incremental demand.
Supporting growth in a regulated future
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Don't Wait Until It's Too Late
The direction of travel for consumer finance is clear: more regulation, greater transparency, and higher expectations around customer care. For retailers, this does not diminish the value of finance – it reinforces the importance of getting it right.
In cycling retail, where purchases are often both high-value and high-consideration, the right finance partner can make a measurable difference. Not just in enabling transactions, but in supporting long-term growth, building customer trust, and ensuring compliance in an increasingly complex landscape.
Choosing that partner requires careful evaluation. But for those that get it right, retail finance remains one of the most effective tools available to convert intent into sales and deliver a better overall customer experience.
Increase your sales and maximise customer spend with V12 + ACT: We’ve teamed up with V12 Finance, to offer a market-leading range of finance products with ACT preferential rates. Find out more here. ACT Gold Members have no set up fee or monthly fees.