The Afterpay Ltd (ASX: APT) share price has started the week in the red.
In afternoon trade the payments company's shares were down as much as 3% to $28.08 at one stage.
They have since recovered a touch, but are still down 1.5% to $28.65 at the time of writing.
Why is the Afterpay share price under pressure today?
As well as being caught up in the general market weakness, news out of the UK appears to be weighing on its shares today.
On Friday the UK's Financial Conduct Authority (FCA) announced several new measures that have been introduced to help consumers that are facing short-term cash flow problems because of coronavirus pandemic.
These measures relate to personal loans, credit cards, overdrafts, and other forms of credit such as buy now later (BNPL). The latter of course will impact Afterpay's UK based business, Clearpay.
What measures are being put in place?
The FCA explained that the measures will allow those in financial difficulties to defer their repayments.
It said: "If our proposals are confirmed and you are facing temporary payment difficulties because of coronavirus, you will be able to ask for a freeze on repayments to your BNPL agreements for 3 months. If you have a BNPL agreement and you are within the promotional period, your lender should extend the promotional period by the length of the freeze period."
The FCA advised that these measures are only intended to provide help for short-term cash flow problems.
Companies like Afterpay's Clearpay have also been told to help those that are having longer-term problems or are in other financial difficulty.
This includes companies either suspending, reducing, waiving or cancelling any further interest or charges. And deferring payment of arrears or accepting smaller payments for a reasonable period of time.
What now?
Overall, I don't think this is anything that Afterpay cannot adjust to. Furthermore, given the relatively small balance that a typical user has, I'm optimistic the majority of its users in the country will be able to continue making payments as normal.
As a result, while I believe the pandemic could stifle its growth in the immediate term, I expect it to accelerate again once the crisis passes. This could make it worth taking advantage of this pullback with a small investment in its shares with a long term view.
