Buy Now Pay Later (BNPL) has taken over Southeast Asia’s shopping scene, and in Malaysia, it’s everywhere, resulting to massive addiction. With just a few taps on a phone, you can buy now and, well, worry about paying later. It sounds like a great deal, right? No credit card hassles, no long forms, just instant gratification.

But for many young and mostly naive consumers, that convenience can quickly turn into a financial nightmare. 

In 2023 alone, Malaysians made 77.3 million BNPL transactions, spending a whopping RM 6.2 billion (USD $1.38 billion). Nearly half of these users are under 30, drawn in by the promise of easy, interest-free instalments. But what starts as a simple purchase soon snowballs into something bigger.

BNPL services in Malaysia began gaining traction in 2019, with platforms like Atome, Grab PayLater, and Shopee PayLater driving the trend. Unlike credit cards that require extensive paperwork and credit checks, BNPL is designed to be quick and hassle-free.

This accessibility makes it particularly attractive to young users who may not qualify for traditional credit lines.

A Debt Spiral Disguised as Convenience 

Take a look at this 25-year-old man who loves online shopping. BNPL seemed like the perfect way to get what he needed without straining his budget. But then, the due dates crept up, and suddenly, he was missing payments, racking up late fees, and struggling to keep up.

Sound familiar? He’s not alone.

As of late 2023, about 53,000 Malaysians under 30 were drowning in nearly RM 1.9 billion (USD $423 million) of debt. With BNPL providers making spending dangerously easy, skipping the rigorous approval process required for credit cards, it’s all too simple to keep spending without realising the full cost.

Plus, with no regulation in place (just yet), many young users, who are unaware of the financial implications, can find themselves stuck in a cycle of revolving debt. The penalties for late payments, which range from RM 10 to RM 50 per missed instalment, may seem insignificant at first.

However, for those juggling multiple BNPL debts (and many other “hidden” debts too), these fees add up quickly, making it harder to break free from the cycle.

BNPL Is Causing Addiction 

Why do so many young people fall into the BNPL trap? Blame it on the way our brains work. Psychologists call it “present bias“. We prioritise short-term pleasure over long-term financial well-being. BNPL takes full advantage of this “addiction”, making purchases feel painless.

Unlike traditional loans, BNPL feels more like a casual favour than real debt. No mountains of paperwork, no immediate consequences, just tap and go.

And because payments are spread out over months, it’s easy to lose track of how much you actually owe. Before you know it, you’re juggling multiple BNPL payments and struggling to catch up.

In Australia, a woman found herself stuck in this exact cycle. What started as small purchases (with mostly being clothes, flights, and skincare) quickly spiralled into a year and a half of constant repayments. She convinced herself it was all manageable until she couldn’t pay rent. That’s when she knew she had a problem.

The issue isn’t just limited to Malaysia. In Indonesia, young people are similarly caught in a BNPL-induced spending frenzy.

The ease of purchasing items with just a few clicks has fueled excessive consumption, with many using BNPL not just for essential purchases but for luxury items, vacations, and even daily expenses like food and ride-sharing services.

Some users even resort to taking on new BNPL loans just to pay off existing ones, pushing them further into financial instability. Like digging a hole just to cover up another.

Escaping the BNPL Trap 

So, how do you break free? First, it’s crucial to recognise BNPL for what it truly is. It is a credit, with real consequences.

It’s not just an easy payment plan, it’s a financial commitment that, if mismanaged, can quickly turn into an overwhelming burden.

Regulators in Malaysia are starting to take notice. Bank Negara Malaysia has been pushing for stricter lending rules to ensure BNPL providers assess a borrower’s ability to pay before approving transactions.

This is an important step toward curbing reckless lending practices, but ultimately, personal responsibility plays the biggest role in staying financially secure.

A good starting point is understanding the real cost of BNPL purchases. Companies often highlight “zero interest” as a major perk, but hidden fees and penalties for missed payments can quickly add up. Reading the fine print before signing up is essential to avoiding unexpected charges.

Setting spending limits is another effective strategy. Just because a purchase is broken down into smaller instalments doesn’t mean it’s affordable.

Ask yourself: would you still buy this item if you had to pay for it upfront? If not, it might be a sign that it’s an unnecessary expense.

It’s also important to distinguish between needs and wants. BNPL makes it dangerously easy to justify impulse purchases (mostly on fashion, gadgets, or even vacations) without considering the long-term financial impact.

Before clicking “buy now,” take a moment to reflect: is this something you genuinely need, or just something you want in the moment?

Another key step is staying on top of payments. Late fees may seem small at first, but they accumulate quickly, making it harder to pay off existing debt. Setting reminders or automating payments can prevent missed deadlines and additional costs.

Finally, if BNPL debt starts to feel unmanageable, seeking financial advice can be a game-changer. Consulting a financial counsellor or using budgeting tools can provide clarity on how to regain control and break free from the debt cycle.

The Bottom Line 

BNPL while can cause some sort of an addiction, isn’t inherently bad. Used wisely, it can be a helpful tool. But for many young Malaysians, it’s become a one-way ticket to financial stress.

Without proper education and regulation, the debt cycle will only get worse. It’s time to take control because the best kind of debt is the one you never get into in the first place.

As Malaysia and the broader Southeast Asian region work toward better regulations, financial literacy must also be prioritised. Schools, universities, and workplaces should integrate financial management education into their programs, equipping young people with the knowledge they need to make smarter financial decisions.

Until then, the best sort of defence against BNPL debt is awareness, discipline, and making informed spending choices.

And this applies to me too.

Featured image credit: Edited from Freepik