A LEADING economist has warned that the growing reliance on ‘Buy Now, Pay Later’ (BNPL) schemes could pose significant financial risks to consumers unless properly regulated, with the introduction of the Consumer Credit Act 2025 seen as a necessary step to protect users from escalating debt.
Bank Muamalat Malaysia Berhad Chief Economist Dr. Mohd Afzanizam Abdul Rashid (pic) has urged consumers to avoid impulsive spending and plan their finances carefully ahead of the new law, which is set to come into effect later this year.
The legislation aims to regulate BNPL services, which have become increasingly popular but carry the potential to disrupt users' financial stability if left unchecked.
“The core issue is ensuring that consumers’ financial positions are safeguarded,” Dr. Afzanizam explained. “The law provides a means for the government to regulate the BNPL industry, which will ultimately protect consumers from accumulating unsustainable debt.”
He advised individuals who rely heavily on BNPL services to resist hasty spending decisions. “It’s crucial for consumers to draw up a personal budget and evaluate their financial capacity before making any purchases,” he said.
“This approach is essential to maintain a clear understanding of one's finances and avoid the temptation of impulse buying, which can lead to significant financial harm.”
Dr. Afzanizam stresses the importance of self-regulation in managing personal finances.
“Financial literacy is key,” he added. “Consumers must understand the consequences of their financial choices. We need to ramp up campaigns promoting financial literacy to ensure that individuals are fully aware of the impact of their financial decisions on their long-term well-being.”
With the expected implementation of the Consumer Credit Act 2025 later this year, BNPL services will face stricter controls. Reports suggest that consumers will no longer have the freedom to spend recklessly through these schemes, marking a significant shift in how consumer credit is managed in the country.
The introduction of this act reflects growing concerns about the potential for BNPL services to encourage unwise spending, particularly among younger consumers who may not fully comprehend the long-term financial implications. – March 30, 2025
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