Kuala Lumpur: Buy Now, Pay Later (BNPL) activity has seen swift growth, yet its overall impact on household debt remains limited, with an outstanding BNPL debt of RM2.8 billion, equating to just 0.2% of total household debt as of December 2024.

According to BERNAMA News Agency, Bank Negara Malaysia (BNM) highlighted in its Financial Stability Review for the second half of 2024 that the number of purchases through BNPL significantly increased. Transaction volume reached 83.8 million, with the transaction value hitting RM7.1 billion in the second half of 2024.

BNM reported an increase in active BNPL users, reaching 5.1 million by the end of December 2024, up from 4.3 million in June 2024. An active user is defined as someone with at least one BNPL transaction in the past year, and a single consumer may have multiple BNPL accounts with different providers.

The central bank emphasized that risks linked to BNPL are still manageable. The overdue amount for BNPL remained low, accounting for 2.9% of total outstanding balances during the period, slightly up from June 2024’s 2.6%.

BNM observed that BNPL providers are offering facilities for higher-value transactions with extended instalment periods of up to 24 months, compared to the previous one to six months. Providers are also implementing measures to mitigate risks, such as setting lower credit limits for new users, suspending facilities upon missed payments, and managing credit limits for users facing repayment challenges.

The introduction of the Consumer Credit Act (CCA) in 2025 will further bolster regulation. It will lead to the creation of the Consumer Credit Commission, tasked with overseeing non-bank credit providers and credit service providers currently outside regulatory frameworks, including those offering BNPL schemes. BNM stated that this will enhance the protection of credit consumers through stronger regulatory and supervisory measures.