Bank Negara Malaysia (BNM) announced today that it is driving inter-agency efforts to enact the Consumer Credit Act in 2022. Datuk Nor Shamsiah Mohd Yunus, Governor of BNM said that this will strengthen regulatory arrangements for all consumer credit activities including providers of Buy Now Pay Later (BNPL) schemes.

Bank Negara said it will be working together with the Securities Commission Malaysia and also the Ministry of Finance to enforce the act.

“These schemes have been on the rise, not just in Malaysia, but also in other countries and there are legitimate concerns that such schemes may encourage consumers to spend beyond their means, with expensive debt that they may not be able to repay, and most BNPL schemes in Malaysia are offered by non-banks,”

Datuk Nor Shamsiah told reporters.

This regulation will provide much-needed clarity to the regulatory treatment of BNPL schemes which some have considered to be operating in the grey area. With this announcement, Malaysia joins the UK and Australia in being among the first to regulate this growing segment within the fintech space.

Meanwhile, in Singapore, the Monetary Authority of Singapore said that BNPL “does not pose an urgent risk” and they will “assess whether a regulatory framework is necessary to guide the evolution of BNPL schemes as they become more widely used in Singapore.”