Southeast Asia’s buy now pay later (BNPL) or installment payments market will reach US$53.2 billion by 2027, growing from just US$14.7 billion in 2023, with 20.7% of adults in the region having used the service.

By 2027, the Philippines is expected to experience the fastest growth, with transaction values soaring to US$8.2 billion—an impressive 235% increase from 2024. Malaysia’s pay-later transaction value is projected to rise to US$11.3 billion, reflecting a 215% growth. Meanwhile, Indonesia’s installment payments are set to reach US$16.8 billion, marking a 209% increase from 2024.

The Evolution of Installment Payments

The proliferation of installment payment solutions has expanded beyond the e-commerce space during the BNPL heyday in the pandemic years. As we head into 2025, Deloitte projects installment payments to encompass new sectors like housing and utilities, grocery, car payments and repairs, and travel, especially as consumers battle inflation and focus on non-discretionary spending.

As this trend continues to spread into new sectors, businesses like e-commerce and offline retail can stay ahead of the curve by leveraging flexible payment solutions like Fiuu’s installment payment solutions.

Fiuu’s Seven-Bank Powered Installment Solutions

To tap into this rapidly growing demand, Fiuu (formerly Razer Merchant Services) has developed easy-to-integrate installment payment solutions powered by seven leading banks. Fiuu’s installment payment solutions provide customers with the flexibility to pay off substantial purchases through organized repayment structures over a set duration, which can range from months to years.

Eng Sheng Guan, CEO of Fiuu, said,

“Fiuu provides businesses with streamlined installment payment solutions that enable them to offer customers greater payment flexibility, with payment durations ranging from 3 to 60 months, in addition to reducing the need for merchants to parse through different financing options for their customers. This solution also benefits offline retail merchants using point-of-sale (POS) terminals and Fiuu Virtual Terminal, in addition to e-commerce platforms. With a minimum transaction value of RM300, businesses can enable customers to convert purchases into installments based on their preferred duration.”

“Through Fiuu’s installment payment solutions, we connect businesses with seven banks: HSBC Bank, Standard Chartered Bank, Hong Leong Bank, RHB Bank, AmBank, Affin Bank, and OCBC Bank. As such, Fiuu provides a single platform that simplifies payment setup and removes the need to approach multiple banks.”

“In addition to our installment payment solutions, we have also launched Visa’s Installment Payment Solutions (VIS) in Malaysia, Singapore, and the Philippines. This partnership allows Fiuu to support multiple countries with access to Visa’s extensive card network, giving businesses even more options for offering flexible payment plans to their customers. With this expanded capability, Fiuu is further enabling merchants to tap into new growth opportunities across Southeast Asia and beyond, creating a competitive edge while simplifying their payment processing needs.”

Installment Payments Drive Gen Z Purchases

No longer a ‘nice-to-have,’ customers now expect installment payments as one of their payment options upon checkout. One in five merchants report the most common complaint they receive from consumers is that they cannot pay how they want. Nearly the same share of merchants said a lack of installment payments options is their most commonly received complaint.

Installment payment solutions are also the payment option of choice for the digital-first and Gen Z customers, especially in the upcoming festive period. Pay later is being used to rationalize splurge purchases (44% of Gen Z, and 21% of shoppers overall).

In addition, the cliché that only lower-income customers use installment payment options is being challenged, as a U.S. survey found that consumers making more than US$100,000 a year favor pay-later options. In fact, 60% of respondents earning more than US$100,000 have recently used a pay-later solution, compared to 48% of those earning less than US$50,000.

With installment payment solutions, there is also the opportunity to build customer loyalty through value-added services, such as loyalty programs and discounts.

Activating Cross-Border ASEAN Payments

As one of the largest digital payment service providers, Fiuu also helps merchants unlock over 110 major payment methods across Southeast Asia while enabling businesses to accept local and cross-border payments in the region.

In June 2023, Fiuu secured Visa and Mastercard’s Direct Acquiring license in Malaysia, Singapore, and the Philippines, as part of a regional partnership. Through these partnerships, Fiuu aims to expand the card scheme to these countries across different industry verticals, including on-demand services, government, market traders, e-sports, and education.

Learn more about Fiuu’s installment payment solutions here, or sign up for Fiuu’s solutions here.

Featured image credit: edited from freepik