Kuala Lumpur: The sharp rise in transactions under the ‘Buy Now, Pay Later’ (BNPL) scheme, which surged to RM7.1 billion in the second half of 2024, has surprised many. Even more surprising is the fact that the most active BNPL users are individuals aged 21 to 45, earning less than RM5,000 per month. While many acknowledge BNPL as a convenient financial tool, concerns are growing about its potential to become a hidden debt trap if not managed wisely.
According to BERNAMA News Agency, a digital marketing consultant at a private company, Muhamad Rakib Ansari, 24, emphasized the importance of mindful spending to avoid excessive debt and unnecessary expenditures. He noted that the scheme can be beneficial if payments are made promptly. ‘But you have to cut your coat according to your cloth, a reminder that we should only buy and spend on things that are within our budget. This BNPL scheme can be a problem if not used wisely. For instance, some BNPL payments come with exorbitant fees,’ he explained.
A student at a public university in Selangor, Muhamad Harris Zafry, 24, shared his experience of using BNPL for purchasing reference books and electronic goods. He acknowledged the convenience but cautioned against potential financial burdens due to delayed payments and subsequent penalties. ‘With BNPL, I don’t have to worry about securing money immediately to get the items I need. However, if payments are delayed, penalties are imposed by the BNPL provider which has led to an increase in my debt,’ he said.
Meanwhile, the Federation of Malaysian Consumer Associations (FOMCA) chief operating officer, Nur Asyikin Aminuddin, has called for regulation of the BNPL scheme to protect consumers from fraud and excessive charges. She recommended that BNPL service providers assess consumers’ financial capacity before approving transactions and ensure full transparency in terms and conditions, particularly regarding charges and penalties. ‘The key is to use BNPL only for essential purchases, not just to satisfy wants,’ she stated.
On March 11, Finance Minister II Datuk Seri Amir Hamzah Azizan reported that local consumer BNPL transactions surged in the second half of 2024, reaching RM7.1 billion, up from RM4.9 billion in the first half of the year, with 12 companies offering the service. He noted that while the growing use of BNPL in Malaysia had raised concerns over household debt levels, the overall increase in transactions remains manageable.