Kuala lumpur: The Consumer Credit Commission (CCC) will implement a comprehensive and sustainable regulatory framework for the ‘buy now, pay later’ (BNPL) scheme to ensure the public does not fall into debt traps or face a rise in bankruptcy cases. Deputy Finance Minister Lim Hui Ying announced that under the framework, BNPL companies will be required to conduct debt affordability assessments before approving credit facilities for consumers.

According to BERNAMA News Agency, this assessment is crucial to ensure that credit users can repay the borrowed amount without facing serious financial stress or falling into a debt trap. The CCC will enforce compliance within the BNPL industry regarding the requirement to carry out these affordability assessments. Currently, most BNPL users take out small loans that do not exceed the legal threshold for bankruptcy proceedings.

Lim stated that the CCC will also require BNPL providers to transparently disclose all information related to credit terms, including fees, before any credit facility is offered. The government also emphasises the importance of financial literacy so that the public is better equipped to manage their finances and understand the risks of excessive BNPL usage. This approach aims to protect consumers from uncontrollable debt burdens and promote responsible borrowing practices, she added, noting that the BNPL market in Malaysia is expanding rapidly.

Currently, 16 companies offer BNPL schemes, with SPay Later, Atome, and GrabPay Later being the three largest providers, collectively holding over 95 percent of the market share.