The Buy Now Pay Later (BNPL) trend continues to gain momentum in Malaysia, with a staggering 102.6 million transactions worth RM9.3 billion recorded in the first half of 2025 — a 31% increase from RM7.1 billion in the second half of 2024. What’s more eye-opening is that 40% of these transactions were made by Malaysians aged 30 and below, sparking concerns about rising financial vulnerability among the youth.
Understanding BNPL’s Popularity
BNPL services allow consumers to split their purchases into interest-free instalments, making it easier to access goods without upfront payment. With increasing living costs and an inflation rate that puts pressure on daily expenses, it’s no surprise that younger consumers are turning to BNPL schemes as a short-term solution.
According to Bank Negara Malaysia, the outstanding BNPL balance stood at RM3.8 billion as of June 30, 2025, representing just 0.2% of Malaysia’s total household debt. While that may seem low, the rapid uptake — especially among young consumers — raises red flags about potential overdependence on easy credit.
The Risk Behind the Convenience
While the data shows that 88% of users are paying their instalments on time (based on a 2024 study by the Consumer Credit Oversight Board Task Force), nearly 169,000 users (2.6%) have overdue payments, amounting to RM121.8 million. That’s a small percentage, but in absolute terms, it reflects growing credit risk — particularly when BNPL providers operate with less stringent checks compared to banks.
With 6.5 million active BNPL accounts, this form of credit is now deeply embedded in the everyday financial choices of Malaysians, from gadgets to fashion, even groceries. However, a lack of awareness about repayment obligations and the psychological ease of “buying now, paying later” can trap consumers in a cycle of debt.
What’s Being Done: Consumer Credit Act 2025
To prevent BNPL from spiraling into a debt trap, the Consumer Credit Act 2025 (AKP) will soon come into play. This legislation mandates:
- Proper affordability assessments before offering BNPL credit.
- Transparent terms with clear disclosure of fees and obligations.
- Fair charges to prevent hidden costs from catching consumers off-guard.
- Ethical debt collection practices to protect users in default.
This regulation is not about restricting credit but about making it safer, clearer, and more responsible.
Financial Literacy: The Real Solution
Beyond laws and regulation, the real solution lies in financial literacy. Many young Malaysians lack the understanding of how deferred payments can affect their long-term financial health. BNPL should be treated as a financial tool, not a lifeline. It’s crucial to read the fine print, understand repayment schedules, and budget accordingly.
Final Thoughts
BNPL is here to stay — it’s fast, accessible, and flexible. But like any credit product, it must be used responsibly. With proper regulation and a national push for financial education, Malaysia can strike a balance between innovation and protection, ensuring that BNPL supports, rather than undermines, financial wellbeing.
