PETALING JAYA: Unlike a bank loan where the commitment is clear and documented, the risk of a Buy Now, Pay Later (BNPL) scheme isn’t always obvious at first.
It can be potentially dangerous because obligations tend to accumulate quietly, said Financial Planning Association of Malaysia (FPAM) president Alvin Tan Chin Cherng in response to reports of an increase in BNPL users from 2.6 million in 2023 to seven million last year.
“Although a person with four or five active arrangements across different platforms might find them manageable, such collective repayments can eat up a disproportionate share of one’s monthly take-home pay, and most people genuinely don’t see it coming,” he said.
Tan said many young Malaysians are unaware of their credit scores, especially with the gazettement of the Consumer Credit Act 2025.
BNPL providers are now mandated to conduct creditworthiness and affordability assessments before approving financing.
“This is a significant development. It means BNPL behaviour will be factored into a person’s credit profile.
“Missed or late BNPL payments could affect a person’s ability to secure a housing loan or car financing in the future,” he said.
According to Tan, research shows that digital and deferred payment methods reduce the psychological “pain of paying”.
“This could lead to people spending more and not feeling the immediate impact of parting with money. BNPL is designed to be frictionless, and while convenient, can work against sound financial decision-making,” he said.
Although the increase of BNPL schemes can be viewed positively with greater financial inclusion and the democratisation of credit access, Tan said people who may not qualify for traditional credit products can also access financing.
“We need to look at this in context. Malaysia’s household debt already stands at around RM1.63 trillion, and personal loan-related bankruptcies make up nearly half of all insolvency cases.
“Against that backdrop, a near-tripling of BNPL users in two years is something we should monitor carefully.
“The Finance Minister has noted that overdue financing stands at a manageable level but the pace of growth, particularly among younger users, means that even a modest deterioration in repayment behaviour could translate into significant numbers very quickly.
“What concerns me most is the normalisation of deferred spending as a lifestyle habit rather than an occasional financial tool. When BNPL becomes the default way young people shop, it fundamentally changes how they relate to money and not always in a healthy direction,” he said.
Licensed financial planner Gunaseelan Kannan also views the increase of BNPL as somewhat concerning because of the easy spending design, which for many youths feel less like borrowing and more like delaying payment.
“The approval process is simple, there are minimal checks, and the instalments look small, so it becomes very attractive. From what I see in financial advisory, the issue is not one BNPL purchase, but when someone starts using multiple platforms at the same time.
“Those small instalments can quickly add up and affect monthly cash flow. Many young people are still building their financial habits, so without proper budgeting or financial literacy, it can slowly turn into a debt cycle,” he said.
Gunaseelan said that any form of credit must have proper oversight and be balanced.
He said there must be safeguards so that young consumers don’t overuse it through regulation and financial education.
When asked about the Consumer Credit Act 2025 [Act 873], he said it is a timely move with guardrails in place by bringing accountability in terms of lending, charges transparency and consumer protection.
“If there are clearer rules on affordability checks and disclosure, it reduces the risk of people taking on more credit than they can handle. So overall, regulation is important not to stop innovation, but to make sure the system remains responsible and sustainable,” he said.
