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Malaysian Reserve
09-06-2025
- Business
- Malaysian Reserve
Smart spending or slippery slope
OVER the past few years, Buy Now, Pay Later (BNPL) services have gained remarkable traction in Malaysia. Platforms such as Atome, Grab PayLater, SPayLater and hoolah have become household names, offering consumers the chance to split their payments into manageable installments without the need for traditional credit checks or interest rates — at least at first glance. While these services have democratised access to consumer credit, especially for younger Malaysians and those underserved by traditional banks, they also come with considerable risks. As we look at the benefits and drawbacks of BNPL in Malaysia, it's clear that although this payment option can be helpful, it should be used carefully and with proper monitoring. Increased Financial Accessibility One of the most significant benefits of BNPL is its ability to provide credit access to individuals who might otherwise be excluded from traditional financing options. Many Malaysians, particularly younger consumers and gig economy workers, lack sufficient credit history or stable income to qualify for bank loans or credit cards. BNPL platforms sidestep these barriers, allowing more people to participate in the consumer economy. BNPL offers a convenient way to manage cashflow. Especially for salaried individuals who face short-term liquidity constraints, being able to spread out payments without paying interest (if payments are made on time) can be highly beneficial. This can be particularly useful for big-ticket purchases such as electronics or household appliances. Many BNPL services advertise them- selves as 'interest-free' if payments are made on time, which can be more affordable than traditional credit card debt that typically comes with high interest rates. For disciplined users, this can be a more cost-effective financing method. BNPL also provides a boost to local e-commerce and retail industries. By lowering the barrier to purchase, it encourages higher consumer spending. This is especially evident during major sales events like 11.11 or Aidilfitri promotions, where BNPL plays a key role in enabling consumers to buy more while spreading their expenses. Technological Convenience The user experience with BNPL apps is generally smooth, quick and integrated directly into the checkout process. Many Malaysians, who are increasingly digital-savvy, appreciate this seamless, app-based access to credit compared to the paperwork-heavy bank loan process. Despite the convenience and flexibility that BNPL services offer, it is important not to overlook the potential risks they pose. Consumers should approach these services with caution, evaluating their financial situation and the necessity of their purchases. Without careful consideration, what seems like a helpful short-term solution could turn into long-term financial strain. The most significant concern with BNPL is the ease with which consumers can accumulate debt. Because the barrier to entry is low and the approval process is quick, many users take on multiple BNPL plans simultaneously. Without a consolidated credit check across different platforms, it's easy for consumers to lose track of how much they owe — leading to over-indebtedness. Malaysia's regulatory framework for BNPL is still in its early stages. While Bank Negara Malaysia (BNM) and the Ministry of Finance (MOF) have signalled intent to regulate this space, the current environment allows BNPL providers significant leeway in their operations. This regulatory grey area poses risks to consumer protection, especially in terms of transparency, data privacy and dispute resolution. Although BNPL is often marketed as 'interest-free', many platforms charge significant late fees if payments are missed. These penalties can quickly add up, making what seemed like a good deal an expensive one. For financially vulnerable consumers, this can lead to a cycle of missed payments and escalating fees. BNPL inherently encourages spending beyond one's means. Because consumers are not required to pay the full price upfront, they may be tempted to make unnecessary or luxury purchases they would otherwise avoid. This can distort financial priorities, especially among younger users with less financial literacy. Unlike credit cards or traditional loans, most BNPL platforms in Malaysia do not report repayment behaviour to credit bureaus. This means that even responsible BNPL users gain little to no benefit in building their credit scores, which could affect their ability to access more substantial credit in the future. Impact on Malaysian Consumers The impact of BNPL on Malaysian consumers is deeply nuanced. On one hand, BNPL has become a crucial financial tool, especially amid rising living costs and economic uncertainty. For many Malaysians, particularly the bottom 40% (B40) and middle 40% (M40) income groups, BNPL offers a financial lifeline to purchase essential goods without overburdening their monthly budgets. However, the same flexibility that makes BNPL attractive can also be dangerous. According to reports by the Credit Counselling and Debt Management Agency (AKPK), there has been a noticeable uptick in the number of young Malaysians seeking debt management assistance — many of whom cite BNPL as one of their liabilities. This trend indicates a growing reliance on short-term credit solutions without corresponding financial education or planning. Another area of concern is the lack of transparency and standardised terms across platforms. Some BNPL providers impose different fees or require access to personal data that might be used for targetted marketing or even resold to third parties. This lack of uniformity can confuse consumers and lead to poor financial decisions. To address these challenges, Malaysian authorities must accelerate the implementation of regulatory frameworks that protect consumers without stifling innovation. The Financial Services Act and forthcoming updates to the Consumer Credit Act could provide the legal infrastructure needed to govern BNPL practices, enforce fair lending standards and ensure that providers operate with transparency. Moreover, financial literacy campaigns are crucial. Malaysians, particularly those in younger demographics, need to understand that BNPL is a form of debt — not a free pass to consume. Education efforts should emphasise budgeting, understanding interest and fees, and the importance of timely repayment. BNPL in Malaysia is a double-edged sword. While it provides a flexible, accessible credit alternative that can help consumers better manage their cashflow and make necessary purchases, it also poses significant risks when used irresponsibly. The growing adoption of BNPL reflects changing consumer behaviour and a broader shift toward digital financial services — a trend that is unlikely to slow down. For BNPL to be a force for good, it must be matched with responsible lending practices, clear regulations and informed consumer behaviour. Only then can it truly support Malaysia's financial inclusion agenda without creating a new generation of debt-strapped consumers. Intan Baha is the chief sub-editor/ production editor of The Malaysian Reserve. This article first appeared in The Malaysian Reserve weekly print edition
The Sun
05-05-2025
- Business
- The Sun
Malaysia's BNPL: How tech preys on financial vulnerability
AS Malaysia's digital economy flourishes, a new financial trend is transforming the way consumers shop: Buy Now, Pay Later (BNPL). Once seen as a niche payment option, BNPL has rapidly gained traction, especially among young Malaysians, thanks to its integration with major e-commerce platforms and mobile apps. However, as usage surges, so do concerns over its long-term consequences, especially with the extent of its proliferation into businesses that reasonably should not offer it, such as a recent BNPL advertisement by a fried chicken fast food chain in Malaysia. Big BNPL bang In recent years, BNPL services such as Atome, Shopee PayLater, Grab PayLater and Pace have embedded themselves into Malaysia's retail and digital ecosystem. These services allow consumers to split payments into interest-free instalments, often without the need for traditional credit checks. This model has proven immensely popular among the country's youth. According to a 2023 report by Bank Negara Malaysia, the adoption of BNPL services is highest among those aged 18 to 30. The appeal lies in its simplicity and accessibility, especially for individuals who do not own credit cards or lack a formal credit history, but do own smartphones and internet access. A key driver of BNPL's growth in Malaysia is its seamless integration into e-commerce apps. Platforms such as Shopee and Lazada offer PayLater options directly at checkout, creating a frictionless experience that encourages impulse purchases. Meanwhile, Grab PayLater extends BNPL services beyond retail, letting users defer payments on ride-hailing, food delivery and in-store QR code purchases. This level of integration has been shown to boost conversion rates and increase average basket sizes for merchants, according to industry insights from BNPL providers. For brands, offering BNPL has become a competitive necessity, particularly in sectors such as fashion, electronics and beauty. This is a financial model that thrives on technology. Algorithms assess eligibility in seconds using alternative credit scoring methods, while mobile apps make instalment management intuitive and accessible. With push notifications, gamified reward systems and personalised offers, many platforms nudge users towards frequent use without fully highlighting the financial risks. Despite its perks, BNPL is increasingly being scrutinised for fostering unsustainable financial habits. As many BNPL providers do not report to central credit agencies, debts can accumulate unchecked, until missed payments trigger late fees or third-party collections. Predatory for vulnerable demographics The Federation of Malaysian Consumers Associations has also voiced concerns, with CEO Saravanan Thambirajah highlighting that the younger generation are particularly prone to impulse spending via BNPL due to its 'illusion of affordability'. The ease and accessibility of BNPL services disproportionately impact younger and lower-income Malaysians, who are often the least financially prepared to manage multiple instalment payments. Often at the lower end of the economic spectrum and lacking financial literacy, these consumers are frequently targeted through social media advertising and in-app promotions, framing BNPL as a lifestyle upgrade rather than a loan. According to data from Fintech News Malaysia, the majority of BNPL users report using the service for non-essential purchases, such as fashion items, gadgets and entertainment. While some platforms have introduced spending caps or payment reminders, consumer education remains limited. However, as more Malaysians embrace these services, the risks of debt accumulation, along with financial, technology and social media illiteracy must not be ignored. In a world of instant gratification with just a few swipes on our phones, the question remains: Are we buying convenience now and paying the price later? To quote Jay-Z: 'If you can not buy it twice, you can not afford it'. After all, just because you can buy now and pay later, does not mean you should.
The Sun
05-05-2025
- Business
- The Sun
Debt woes, online overspend
AS Malaysia's digital economy flourishes, a new financial trend is transforming the way consumers shop: Buy Now, Pay Later (BNPL). Once seen as a niche payment option, BNPL has rapidly gained traction, especially among young Malaysians, thanks to its integration with major e-commerce platforms and mobile apps. However, as usage surges, so do concerns over its long-term consequences, especially with the extent of its proliferation into businesses that reasonably should not offer it, such as a recent BNPL advertisement by a fried chicken fast food chain in Malaysia. Big BNPL bang In recent years, BNPL services such as Atome, Shopee PayLater, Grab PayLater and Pace have embedded themselves into Malaysia's retail and digital ecosystem. These services allow consumers to split payments into interest-free instalments, often without the need for traditional credit checks. This model has proven immensely popular among the country's youth. According to a 2023 report by Bank Negara Malaysia, the adoption of BNPL services is highest among those aged 18 to 30. The appeal lies in its simplicity and accessibility, especially for individuals who do not own credit cards or lack a formal credit history, but do own smartphones and internet access. A key driver of BNPL's growth in Malaysia is its seamless integration into e-commerce apps. Platforms such as Shopee and Lazada offer PayLater options directly at checkout, creating a frictionless experience that encourages impulse purchases. Meanwhile, Grab PayLater extends BNPL services beyond retail, letting users defer payments on ride-hailing, food delivery and in-store QR code purchases. This level of integration has been shown to boost conversion rates and increase average basket sizes for merchants, according to industry insights from BNPL providers. For brands, offering BNPL has become a competitive necessity, particularly in sectors such as fashion, electronics and beauty. This is a financial model that thrives on technology. Algorithms assess eligibility in seconds using alternative credit scoring methods, while mobile apps make instalment management intuitive and accessible. With push notifications, gamified reward systems and personalised offers, many platforms nudge users towards frequent use without fully highlighting the financial risks. Despite its perks, BNPL is increasingly being scrutinised for fostering unsustainable financial habits. As many BNPL providers do not report to central credit agencies, debts can accumulate unchecked, until missed payments trigger late fees or third-party collections. Predatory for vulnerable demographics The Federation of Malaysian Consumers Associations has also voiced concerns, with CEO Saravanan Thambirajah highlighting that the younger generation are particularly prone to impulse spending via BNPL due to its 'illusion of affordability'. The ease and accessibility of BNPL services disproportionately impact younger and lower-income Malaysians, who are often the least financially prepared to manage multiple instalment payments. Often at the lower end of the economic spectrum and lacking financial literacy, these consumers are frequently targeted through social media advertising and in-app promotions, framing BNPL as a lifestyle upgrade rather than a loan. According to data from Fintech News Malaysia, the majority of BNPL users report using the service for non-essential purchases, such as fashion items, gadgets and entertainment. While some platforms have introduced spending caps or payment reminders, consumer education remains limited. However, as more Malaysians embrace these services, the risks of debt accumulation, along with financial, technology and social media illiteracy must not be ignored. In a world of instant gratification with just a few swipes on our phones, the question remains: Are we buying convenience now and paying the price later? To quote Jay-Z: 'If you can not buy it twice, you can not afford it'. After all, just because you can buy now and pay later, does not mean you should.
Yahoo
06-03-2025
- Business
- Yahoo
Malaysia Buy Now Pay Later Business Report 2025: BNPL Payments to Grow by 15.1% to Reach $2.52 Billion this Year
This report provides a detailed data-centric analysis of the Buy Now Pay Later (BNPL) industry in Malaysia, covering market opportunities and risks across a range of retail categories. With over 75 KPIs at the country level, this report provides a comprehensive understanding of BNPL market dynamics, market size and forecast, and market share statistics. Malaysian Buy Now Pay Later Market Dublin, March 06, 2025 (GLOBE NEWSWIRE) -- The "Malaysia Buy Now Pay Later Business and Investment Opportunities Databook - 75+ KPIs on BNPL Market Size, End-Use Sectors, Market Share, Product Analysis, Business Model, Demographics - Q1 2025 Update" report has been added to BNPL payment market in Malaysia is expected to grow by 15.1% on annual basis to reach US$2.52 billion in 2025. The BNPL market in the country experienced robust growth during 2021-2024, achieving a CAGR of 24.0%. This upward trajectory is expected to continue, with the market forecast to grow at a CAGR of 10.9% during 2025-2030. By the end of 2030, the BNPL sector is projected to expand from its 2024 value of USD 2.19 billion to approximately USD 4.22 BNPL market is evolving rapidly, driven by the surge in e-commerce, diversification into non-traditional sectors, and increasing regulatory focus. Providers such as Atome and Grab PayLater are shaping the market by expanding their offerings and catering to consumer demand for flexible payment the next 2-4 years, BNPL is expected to become a standard payment method across industries, with innovation and compliance playing a critical role in sustaining growth. Providers must balance expansion with responsible lending practices as the market matures to build long-term consumer trust and stability. Competitive Landscape and Regulatory Developments in Malaysia's Buy Now, Pay Later (BNPL) MarketMalaysia's BNPL market is undergoing rapid growth, driven by rising e-commerce adoption and increasing demand for flexible payment options. Key players such as Atome, Grab PayLater, and Shopee PayLater have established strong footholds, contributing to a highly competitive market landscape. Recent strategic partnerships, such as that of Standard Chartered and Pine Labs, underscore the dynamic nature of the sector as providers aim to expand their reach and service the next 2-4 years, the Malaysian BNPL market will see further consolidation as established players strengthen their market positions through mergers and acquisitions. Simultaneously, regulatory changes, led by Bank Negara Malaysia under the forthcoming Consumer Credit Act, will likely foster transparency and consumer protection, shaping a more robust and sustainable BNPL ecosystem. Providers must adapt to these evolving dynamics to maintain competitiveness and meet regulatory standards, ensuring long-term growth and consumer State of the BNPL Market Malaysia's BNPL market is experiencing significant expansion, this surge reflects the increasing adoption of BNPL services among Malaysian consumers, particularly driven by the widespread growth of e-commerce platforms. BNPL has become a convenient alternative payment method, enabling consumers to manage purchases through flexible installment options. The rapid penetration of e-commerce in Malaysia has played a critical role in driving BNPL adoption, as consumers increasingly prefer seamless and flexible payment methods for online transactions. Additionally, the demand for alternative financial solutions that cater to budget-conscious individuals is fueling the popularity of BNPL, making it a vital component of Malaysia's evolving retail and payment landscape. Key Players and New Entrants Atome: A leading BNPL provider in Malaysia, Atome has established a strong presence across various retail sectors. Grab PayLater: Integrated into the Grab ecosystem, Grab PayLater offers BNPL services to its extensive user base, enhancing consumer payment flexibility. Shopee PayLater: Shopee's BNPL service has gained significant traction, contributing to the platform's competitive edge in e-commerce. Rely: As a BNPL provider, Rely has expanded its services in Malaysia, catering to the growing demand for installment payment options. Anticipated Competitive Dynamics The Malaysian BNPL market is expected to grow as established players seek to strengthen their positions through mergers and acquisitions. New entrants, both domestic and international, are likely to enter the market, intensifying competition. Providers may focus on diversifying their services and forming strategic partnerships to differentiate themselves in a crowded market. Increasing Adoption of BNPL Services Malaysia's BNPL market has grown rapidly, with over 5 million users in 2023, driven by expanding providers such as Atome, Grab PayLater, and Rely. The increasing use of BNPL services for small-ticket items such as electronics, fashion, and daily essentials reflects its versatility and appeal to younger demographics. This growth signifies consumer preference for flexible and convenient payment solutions across various spending categories. The expansion of Malaysia's e-commerce market, has created a strong demand for alternative payment methods such as BNPL. With limited credit card penetration and consumers looking to avoid interest-based loans, BNPL has emerged as an attractive option for Millennials and Gen Z. Its zero-interest installment plans align with the financial needs of these demographics, bridging the gap left by traditional credit products. Over the next 2-4 years, BNPL is expected to solidify its position as a mainstream payment method for both high-ticket and everyday purchases in Malaysia. Providers will likely introduce innovative features such as loyalty programs and digital wallet integrations to enhance customer retention and attract new users. As adoption intensifies, the BNPL market will play a pivotal role in shaping Malaysia's retail and financial landscape. Expansion into Non-Traditional Sectors BNPL services in Malaysia are expanding into non-traditional sectors such as healthcare, education, and travel, reflecting their growing versatility. Providers such as Grab PayLater have partnered with healthcare providers to offer installment options for medical treatments, addressing affordability concerns for high-cost services. Similarly, Atome has entered the travel segment, enabling consumers to pay for travel-related expenses in manageable installments, opening new opportunities for consumers and merchants. Consumer demand for flexible payment options in essential and high-value services is a primary driver of BNPL's growth beyond retail. Rising living costs and the shift toward aspirational spending have prompted consumers to seek installment-based solutions for medical treatments and tuition fees. For merchants in these sectors, BNPL offers a competitive edge by attracting cost-sensitive customers and providing accessible payment alternatives, boosting sales and customer satisfaction. Over the next 2-4 years, BNPL's expansion into non-traditional sectors is expected to grow, creating new revenue streams for providers and increasing consumer accessibility to essential services. However, higher-value transactions in sectors such as healthcare and education may necessitate enhanced credit assessments and risk management by BNPL providers. This diversification will likely strengthen BNPL's role in Malaysia's financial ecosystem, catering to consumer needs and merchant opportunities. Rising Regulatory Oversight Regulatory oversight of BNPL services in Malaysia is intensifying as authorities aim to address concerns about consumer debt and transparency. Bank Negara Malaysia (BNM) has emphasized the importance of responsible lending practices, encouraging providers to reassess their business models. This regulatory push reflects a proactive approach to mitigating financial risks associated with BNPL's rapid growth, particularly for vulnerable consumer groups. Concerns about over-indebtedness, especially among younger consumers, have been a significant driver of increased scrutiny. Many BNPL users may not fully understand the financial implications of deferred payments, raising the need for better transparency in terms and conditions. Additionally, Malaysia's regulatory approach has been influenced by global trends in markets such as Singapore and Australia, where stricter regulations have been introduced to enhance consumer protection within the BNPL ecosystem. Over the next 2-4 years, increased regulatory oversight is expected to foster greater transparency and build consumer trust in BNPL services. Providers will likely need to implement stricter credit assessments and clearer disclosures, which could enhance the sector's reputation. However, smaller BNPL providers may face operational challenges in meeting compliance requirements, potentially leading to market consolidation as larger players dominate the regulated environment. Key Attributes: Report Attribute Details No. of Pages 88 Forecast Period 2025 - 2030 Estimated Market Value (USD) in 2025 $2.52 Billion Forecasted Market Value (USD) by 2030 $4.22 Billion Compound Annual Growth Rate 10.9% Regions Covered Malaysia Companies Featured Grab PayLater Atome Klarna Razer Fintech Hoolah Lazada PayLater Shopee PayLater Helo FavePay BigPay For more information about this report visit About is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends. Attachment Malaysian Buy Now Pay Later Market CONTACT: CONTACT: Laura Wood,Senior Press Manager press@ For E.S.T Office Hours Call 1-917-300-0470 For U.S./ CAN Toll Free Call 1-800-526-8630 For GMT Office Hours Call +353-1-416-8900Sign in to access your portfolio
