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MALAYSIA will bring its rapidly growing Buy Now Pay Later (BNPL) sector under a comprehensive regulatory framework through the forthcoming Consumer Credit Act 2025, Finance Minister II Datuk Seri Amir Hamzah Azizan confirmed in Parliament on Monday.
Responding to a question from Bentong MP Young Syefura Othman, Amir said the new law and the establishment of the Consumer Credit Commission (Suruhanjaya Kredit Pengguna, SKP) would subject BNPL providers to licensing, consumer protection standards, and responsible lending obligations.
“The Federal Government is fully aware of the need and concern raised over the unchecked growth of BNPL, which has now reached a transaction value of RM7.1 billion,” he said. “Under the new law, BNPL providers will be required to comply with responsible lending standards to protect credit users.”
Among the key safeguards to be implemented are mandatory affordability assessments prior to credit approval, transparent fee structures, fair contractual terms, and professional debt recovery procedures.
“Affordability assessment is a key requirement BNPL providers must comply with before offering credit. This is essential to ensure that borrowers—particularly young consumers—are not pushed into financial hardship or trapped in unmanageable debt,” Amir added.
The SKP will be tasked with enforcing compliance and will have powers to take appropriate action in cases of breach, including administrative sanctions, civil enforcement, and criminal prosecution, where necessary. BNPL providers will also be required to meet minimum governance, financial, and fit-and-proper standards for licensing.
The government further stressed the importance of financial literacy in tackling excessive credit usage. “The government is committed to ensuring that citizens are equipped to make informed financial decisions and understand the risks of overusing BNPL,” it said.
In a follow-up question, MP Young Syefura pressed the ministry on whether interest rates charged by BNPL providers would be capped. The Finance Ministry responded that the issue is under active consideration by the Consumer Credit Oversight Board Task Force.
“Interest charges imposed by BNPL players typically range from 15% to 30% annually, though some providers impose no interest at all,” the ministry noted. It added that future conduct standards would be “balanced and proportionate”, taking into account borrowers’ indebtedness and credit providers’ operating costs.
The regulatory effort comes amid growing international concern over the BNPL model, which has gained traction among younger consumers but also drawn criticism for weak oversight and its potential to exacerbate personal debt. - August 4, 2025
