Italy's Installment Payment Boom: What Expats Need to Know About BNPL and New Credit Rules

Cofidis Italia, a major consumer lending institution operating within the Crédit Mutuel Alliance Fédérale banking group, delivered aggressive expansion figures for 2025, posting a 24% surge in total credit disbursed compared to the prior year. The upswing translates to over 2.5 million financed transactions and roughly €3 billion in total outstanding loans, signaling both appetite for installment-based purchasing and rising profitability in the sector. Net income for the company spiked 63% year-on-year, according to official results released Tuesday.

Why This Matters:

• Liquidity access is widening: More Italian households are opting for flexible payment models—installment plans and "Buy Now Pay Later" (BNPL)—to manage everyday and high-ticket purchases.

• Profitability signals confidence: The lender's earnings jump suggests strong credit quality and operational efficiency in a market that saw tightening underwriting standards elsewhere.

• Regulatory changes ahead: New EU consumer credit rules (CCD II) take effect in November, imposing stricter transparency and creditworthiness checks on short-term, zero-interest installment products.

The Broader Trend: BNPL and Digital Payment Growth in Italy

Italy's consumer credit landscape is undergoing a structural transformation. BNPL services have expanded significantly, becoming a mainstream financing option alongside traditional personal loans. Digital payment methods now account for a growing share of non-cash transactions nationally, fueled by contactless adoption, mobile wallets, and e-commerce expansion. Cofidis has capitalized on this shift by embedding installment options directly into online and in-store checkout flows.

That omnichannel push is critical in a market where younger consumers increasingly favor installment payment solutions for online purchases, and where the average financed amount has climbed—reflecting household strategies to ease monthly budget strain. Alessandro Borzacca, Cofidis' managing director, characterized 2025 as "a year of solid and consistent growth," adding that the firm aims to be "a benchmark in digital credit and payment deferrals" through an omnichannel strategy.

What CCD II Rules Mean for Expats and Borrowers

The new European Consumer Credit Directive (CCD II), transposed into Italian law via Legislative Decree 212 of 31 December 2025, marks a significant shift in how BNPL and short-term credit products are regulated. The rules raise regulatory coverage thresholds and mandate rigorous solvency checks even for zero-interest offers. In practical terms, this means clearer pre-contract disclosures, mandatory waiting periods before loan activation, and more rigorous affordability assessments before approval.

For borrowers, this translates to stronger consumer protections but also potentially longer approval processes. Lenders tightened standards in late 2025 and are expected to remain cautious through mid-2026. Understanding the total repayable amount and Annual Percentage Rate (APR)—not just monthly installments—is critical, as Italy remains one of Europe's more expensive markets for consumer credit.

Choosing Your Lender: Key Considerations for Expats

Italy's consumer lending market is crowded. Findomestic, Agos Ducato, Compass Banca, and Cofidis lead in disbursed volume, while online challengers like Younited Credit, Scalapay, Klarna, and HeyLight carve share in the BNPL niche, leveraging mobile-first interfaces and faster approval timelines. Multinational players such as Santander Consumer Bank and BNL (BNP Paribas) offer bundled offerings tied to broader banking relationships.

When comparing options, focus on: your credit score and payment history (lenders reward clean records with better rates), the total cost over the repayment period (not just the monthly payment), and the lender's flexibility on early repayment without penalties. Financial advisers recommend limiting total monthly installment commitments to no more than 30% of net household income to avoid overextension.

Outlook: Market Growth Tempered by Regulation

Cofidis' parent company, Crédit Mutuel Alliance Fédérale, posted strong financial results for 2025, providing capital for further Italian market investment. Yet the November CCD II implementation deadline requires all BNPL providers to obtain consumer-credit licenses, conduct full affordability assessments, and disclose standardized cost breakdowns. Compliance infrastructure will weigh on margins, potentially consolidating the market around larger, better-capitalized players.

For now, Cofidis' aggressive volume growth and margin expansion suggest it has found a formula that marries digital distribution with disciplined risk management. Whether that formula holds as regulatory scrutiny tightens and economic conditions evolve will shape competition in a market where flexibility, transparency, and financial stability must coexist.