KUALA LUMPUR: Bank Negara Malaysia is in the process of drafting a Consumer Credit Act (CCA) that aims to impose tighter regulations on companies that provide ‘buy now, pay later’ (BNPL) services. To achieve this, the central bank will set up a special body in the initial stage to oversee entities that offer similar services.
“The consumer credit oversight board task force (CCOB), led by the Ministry of Finance and two agencies, namely BNM and the Securities Commission, has been tasked with developing a comprehensive framework for this purpose,” said BNM Financial Inclusion Department Director Nor Rafidz Nazri.
It is said that the task force will regulate the practices of those non-bank entities that offer credit services to consumers, while also regulating the providers of new credit products such as the BNPL service.
Rafidz revealed that several other ministries are also involved in the law’s enactment, including the Ministry of Domestic Trade and Cost of Living, as well as the Ministry of Housing and Local Government.
According to the CCOB, there are over 2.9 million people who use the BNPL service as of the third quarter of 2023.
The top 3 main BNPL service providers are Atome, Shopee and Grab which recorded the highest number (97%) and value (96%) of transactions of the total recorded.
“The use of BNPL saw double-digit growth in the third quarter of 2023, involving 52 million transactions worth RM4.3 billion,” it said.
“The total outstanding balance of BNPL is relatively small, and most are paid on time with 96% of them having no outstanding payments. However, there are still about 1.3% delayed payments that were recorded within less than three months (of the transactions),” it said.
Out of the 2.9 million active users of the BNPL services, a majority of 47% of users are aged between 31-45, while 44% are aged between 21 and 30.
