These days, purchases can be made using a variety of methods that make it easier for consumers without the need for cash. With rapid emergence of cashless payment platforms, consumers now have more options to make transactions more easily and quickly. In fact, there are online buying platforms that offer the Buy Now, Pay Later (BNPL) method, which resembles the use of a credit card.

BNPL is becoming more popular in Malaysia, especially in the e-commerce platform. Through this scheme, consumers can buy goods or services first and make payment in instalments, usually without interest if paid during the specified period. Among the famous BNPL providers in Malaysia are GrabPay Later, Atome, Shopee PayLater and Razer Fintech.

However, this method raises concerns as consumers tend to make purchases beyond their means without realizing it. Therefore, the Malaysian Ministry of Finance is introducing the Consumer Credit Bill (CUB) which aims to increase protection for credit consumers and regulate the credit industry in Malaysia. This measure is taken to prevent consumers from getting trapped in an unmanageable debt burden.

Meanwhile, lecturer at the Faculty of Business, Economics and Social Development, Universiti Malaysia Terengganu (UMT), Dr. Siti Nurain Muhmad, welcomes the government’s move to enact the Consumer Credit Act (AKP) as a measure to regulate BNPL.

According to him, BNPL has its own benefits but needs to be used responsibly.

“The BNPL scheme provides convenience to consumers to purchase goods without having to pay in advance in the form of instalments. It is an alternative that needs to be used well and not taken advantage of. Most consumers who use this service do not have credit cards, thus making the scheme highly attractive. Furthermore, the BNPL application process is quick and easy without the need to submit detailed information,” she said.

However, she also said the facility could have a negative impact on consumers if not properly controlled.

“Quick application approval without a transparent credit assessment poses risks to consumers, such as failure to pay instalments on time. Without proper control, consumers may spend beyond their means and end up trapped in debt. They may have multiple instalments to pay at once, making it difficult for them to manage their finances well.”

Se added there are high fines and interest charges for consumers who fail to pay their instalments on time, making the purchases more expensive than originally expected.

Additionally, failure to make payments on schedule can negatively impact consumers’ credit score, which can ultimately affect their eligibility for future loans.

She said the Consumer Credit Act (AKP) that will be introduced is hoped will ensure BNPL service providers are more responsible and consumers are better protected from uncontrolled financial risks, thus benefiting society as a whole.

Published by:

Corporate Communications Office

Universiti Malaysia Terengganu