BNPL Malaysia accountholders currently stand at 3.7 million customers according to the Consumer Credit Oversight Board Task Force (CCOB), and its rapid growth isn’t just a number. It’s a seismic shift in consumer behaviour and retail dynamics.
BNPL is becoming the go-to solution for payment flexibility, challenging traditional credit models. As we delve into its evolution, it’s clear that Malaysians are fundamentally reimagining how they interact with credit and commerce.
BNPL Market Growth and Changing Consumer Behaviour
At the heart of this success are over 700,000 registered BNPL merchants catering to the growing demand for flexible payment solutions. Consumers increasingly prefer BNPL over traditional credit cards thanks to simple repayment terms, interest-free options, and the ability to spread out payments with ease.
This shift comes with significant benefits for businesses. Retailers see reduced cart abandonment rates and attract new customer segments, particularly those without traditional credit histories.
The Regulatory Landscape for BNPL
As BNPL grows in popularity, robust regulatory oversight becomes increasingly critical. Bank Negara Malaysia, in collaboration with the Securities Commission (SC) and supported by the Ministry of Finance (MOF), has initiated reforms through the enactment of the Consumer Credit Act (CCA) to address overlaps in regulatory responsibilities and gaps in consumer protection.
The CCA aims to standardise the regulation of non-bank credit providers, including BNPL platforms, ensuring consistent consumer protection. When launched, the Consumer Credit Oversight Board (CCOB) under the CCA will create an independent authority to oversee conduct among consumer credit providers that are not currently regulated.
Over time, this framework will expand to cover other non-bank credit providers, transitioning towards an integrated structure for financial conduct regulation in Malaysia. The first phase of the CCA focuses on regulating unmonitored providers, with full market compliance expected by 2025.
Major players like Shopee, Grab, and Atome are already adhering to Bank Negara Malaysia’s regulations as governed by financial institutions.
Powerhouses Dominating the BNPL Market
Three major players—Shopee, Grab, and Atome—account for over 90% of BNPL Malaysia transactions. Their dominance stems from user-friendly platforms, widespread merchant networks, and strategic partnerships across industries.
BNPL is particularly appealing to consumers excluded from traditional credit systems. However, its ease of access has raised concerns about overspending and potential financial risks.
How BNPL Unlocks New Business Opportunities
For businesses, BNPL Malaysia adoption boosts sales and transforms customer engagement. Retailers who integrate BNPL into their payment options report higher average transaction sizes and reduced cart abandonment, especially given that there’s a total transaction value of RM4.3 billion as of this year.
Interestingly, Valiram has recently partnered with Atome to extend multiple interest-free payment options in Malaysia and Singapore.
What’s Next for BNPL in Malaysia?
As the industry evolves, upcoming regulations and increasing consumer adoption are paving the way for a more mature and stable market. However, the future is unlikely to be dominated by standalone players. Instead, BNPL players integrated within broader ecosystems are set to lead the charge.
This shift is driven by the growing success of ecosystem-based models, where BNPL solutions are embedded within platforms like Shopee, Grab, and Atome’s partnerships. These players generate significant transaction volumes, highlighting the importance of synergy between BNPL services and larger digital ecosystems. Standalone providers, on the other hand, face challenges in achieving similar scale and profitability.
The future of spending will be flexible, inclusive, and increasingly powered by integrated innovation, benefitting consumers, businesses, and regulators.
Featured image credit: Edited from Valiram and Freepik
