CCD II Countdown: New Rules for BNPL and Deferred Payments in the Baltics

The new Consumer Credit Directive (CCD II) reshapes the regulatory landscape for consumer lending, buy-now-pay-later (BNPL) and deferred payment products across the European Union (EU). As the new framework is applicable from November 20, 2026, businesses operating in the Baltic States need to determine whether their products fall within consumer credit regulation, qualify for an exemption or special regime, or require changes to their licensing and compliance arrangements.

Directive (EU) 2023/2225 expands the scope of EU consumer credit regulation to certain interest-free and short-term credit arrangements that could previously fall outside the regime. At the same time, it recognizes a specific category of qualifying deferred payment arrangements. This makes legal classification central to the compliance analysis for fintech companies, BNPL providers, e-commerce businesses, retailers and credit intermediaries.

BNPL and Deferred Payments: Classification Determines the Regulatory Regime

CCD II does not simply bring more payment products within consumer credit regulation. It makes the precise legal classification of each business model increasingly important because different structures may lead to materially different regulatory treatment.

An arrangement should not be classified solely by its commercial label. The analysis should focus on who grants the consumer additional time to pay, whether a third-party creditor is involved, whether interest or other charges apply, the length of the payment period and whether the applicable statutory conditions for a deferred payment category or exemption are satisfied.

A qualifying merchant deferred payment arrangement may therefore be treated differently from a conventional consumer loan or a third-party BNPL product. If the conditions of the relevant special regime are not met, the arrangement must instead be assessed under the broader consumer credit framework, including any authorization, registration and conduct requirements that follow from that classification.

Lithuania: From Legislative Preparation to Implementation

Lithuania has moved from legislative preparation to implementation. The amendments to the Lithuanian Law on Consumer Credit implementing Directive (EU) 2023/2225 were adopted by the Lithuanian Parliament on April 16, 2026, as Law No. XV-822.

The focus should now be on whether an existing or planned product falls within the revised regulatory perimeter, whether an exemption remains available and what operational or licensing changes are required before the new framework applies.

This assessment is particularly relevant for products that have historically relied on being interest-free, low-value, short-term or otherwise outside the traditional understanding of regulated consumer lending.

Latvia: A Distinct Regulatory Regime for Deferred Payment Services

Latvia has taken a particularly significant approach by introducing a specific legal concept of a “deferred payment service” (atlikto maksājumu pakalpojums) into its consumer protection legislation. This is not merely a definition. The classification determines whether an arrangement may benefit from distinct regulatory treatment instead of being subject to the ordinary consumer credit regime.

Under the amended Latvian Consumer Rights Protection Law, a deferred payment service is credit for the purchase of goods, services, digital content or digital services granted by the manufacturer, seller or service provider for the acquisition of its own offering. The arrangement must be provided without another creditor being involved and without interest or other additional charges, except for a limited late-payment charge.

The legal consequence is important: a merchant’s own qualifying deferred payment arrangement should not automatically be treated in the same way as a third-party BNPL product or a conventional consumer loan. The first step is to determine whether the arrangement falls within the statutory deferred payment category. Only after that classification can the applicable regulatory obligations be identified.

If the statutory conditions are satisfied, the arrangement follows the special treatment attached to deferred payment services. If any key condition is missing, for example because a third-party creditor is involved or interest or additional charges are imposed, the product must be reassessed under the ordinary consumer credit framework. That reassessment may trigger broader disclosure, creditworthiness, conduct and licensing requirements.

Latvia therefore provides a particularly clear illustration of why the question is not simply “Is this BNPL?” The correct question is: “What type of credit or deferred payment arrangement is this, and which regulatory regime follows from that classification?”

Estonia: Implementation Still in Progress

Estonia presents a different legislative position. Based on the current information, the principal CCD II implementation package, Draft Act 947 SE, remains before the Riigikogu and is progressing between its first and second readings. The draft is intended to introduce new rules affecting BNPL and small credit products, advertising and digital customer journeys, with application expected from November 20, 2026.

These pending CCD II measures should be distinguished from reforms already adopted, namely the Credit Information Sharing Act (KJS) and the Credit Servicers and Credit Purchasers Act (KIOS).

The KJS establishes Estonia’s first centralized positive credit register. While the full operational rollout is phased, lenders must begin immediate strategic and technical preparations to meet the upcoming timelines.

Fully operational following its transition deadline, KIOS places most debt collection agencies operating in Estonia under the direct licensing and supervision of Finantsinspektsioon. Under KIOS, creditors assigning or selling a consumer credit claim to a third party must provide comprehensive pre-transfer data to the purchaser. Consumers must be formally notified about the transfer, and post-assignment collection fees are strictly capped by law.

Which Regulatory Regime Applies to Your Business Model?

The regulatory analysis should follow a clear sequence: product classification, availability of an exemption or special regime, application of the ordinary consumer credit framework, and only then the resulting licensing, registration and conduct requirements.

Businesses should consider at least the following questions:

• Who legally grants the consumer additional time to pay?
• Is the arrangement offered directly by the seller or through a separate BNPL or financing provider?
• Does the consumer pay interest, service fees or other charges?
• What is the payment period, and when does it begin?
• Does the arrangement satisfy all conditions of the applicable deferred payment category or exemption?
• If the special treatment is unavailable, what authorization, registration, disclosure, creditworthiness and conduct requirements apply?

The answers may differ across the Baltic States. CCD II creates a harmonized European framework, but national implementation remains decisive for product qualification, available exemptions and the applicable supervisory or licensing regime.

What Businesses Should Do Now

Businesses should map all products involving deferred consumer payments and identify the party that legally provides the credit or payment deferral. Each product should then be tested against the relevant national definitions and exemptions, rather than assessed only by reference to commercial terminology.

Any exemption or special regime currently relied upon should be reassessed under the new legislation. If the product falls within the ordinary consumer credit framework, the review should cover licensing or registration, creditworthiness assessment, pre-contractual disclosures, advertising, automated decision-making, remuneration arrangements, internal governance and arrears management.

Compliance should not be treated solely as a documentation exercise. The new rules may affect product design, checkout and onboarding flows, automated decision systems, data sources, customer communications and internal controls. Businesses should therefore involve legal, compliance, product and information technology (IT) teams in the implementation process.

Baltic Outlook

The Baltic consumer credit market is moving into the implementation phase. Lithuania and Latvia have adopted core national measures, while Estonia’s principal CCD II amendments remain in the final stages of the legislative process.

The key issue across the three jurisdictions is no longer whether a product is marketed as BNPL or a deferred payment solution. What matters is its legal structure and the regulatory category into which it falls. Latvia demonstrates this particularly clearly by establishing a distinct deferred payment service category from which a different regulatory treatment may follow.

Businesses should therefore complete their product classification, exemption and licensing analysis because the new CCD II framework is applicable as of November 20, 2026.

ECOVIS ProventusLaw assists fintech companies, BNPL providers, non-bank lenders, retailers, e-commerce businesses and credit intermediaries with consumer credit regulatory assessments, licensing and CCD II implementation across the Baltic States.

Our advice is practical. We prepare procedures your teams can use, documents that match how your systems work, and evidence you can show a supervisory authority. Our teams in Lithuania, Latvia and Estonia work together, with a partner coordinating the specialists involved in your matter. This gives you one point of contact for legal work across the three Baltic States.