KUALA LUMPUR – Bank Negara Malaysia (BNM) is working together with the Finance Ministry and Securities Commission Malaysia to regulate and monitor buy-now-pay-later (BNPL) schemes through the enactment of the Consumer Credit Act this year.
BNPL schemes, which are currently offered by non-bank operators, do not fall within the BNM regulatory purview or that of any regulatory agency, said the central bank in its 2021 annual report released today.
“To further mitigate the risks that BNPL schemes may encourage consumers to spend beyond their means, we have also worked with the Financial Education Network to educate the public on the risks of using BNPL schemes,” BNM said.
It added that for BNPL schemes offered by or in partnership with banking institutions, the banks are expected to observe practices consistent with responsible lending expectations.
BNM noted that BNPL allows customers to make payments in instalments with zero interest; however, there may be other charges levied on the customers, such as processing and late payment fees.
In some cases, the total charges levied by BNPL providers on the customers may be higher than the total interest and charges imposed by conventional lenders.
As such, BNM suggests that borrowers understand the terms and conditions, especially on fees and charges, before using BNPL schemes.
“Borrowers need to pay instalments in full and on time to avoid penalties and keep track of your BNPL commitments, as it is easy to overspend when you use the schemes,” said BNM. – Bernama, March 30, 2022
