KUALA LUMPUR (July 12): The use of buy now, pay later (BNPL) payment methods witnessed an 84.3% year-on-year (y-o-y) increase in transaction value in the first quarter of 2024 (1Q2024), according to an analysis by the Consumer Credit Oversight Board (CCOB) Task Force.

The value of BNPL transactions in 1Q2024 stood at RM2.3 billion, with transaction volume hitting 29 million, compared to 14 million transactions worth RM1.3 billion in 1Q2023. This growth was mainly driven by increased demand and familiarity with its usage.

In 2023, BNPL witnessed a steady double-digit growth, with 77.3 million transactions worth RM6.2 billion.

Of the 3.7 million active BNPL users recorded, the majority are young and working adults aged 21 to 45 years. In 1Q2024, about 3.8% of total active users missed their payments and were recorded as overdue, compared to 5.8% at the end of 1Q2023.

In terms of credit exposure, BNPL recorded an outstanding balance of RM1.42 billion as of the end of 1Q2024, a 34% increase from RM1.06 billion in the fourth quarter of 2023. Of this, 2.8% of the total credit exposure was overdue, with the average overdue amount per customer standing at RM370.

BNPL accounted for 0.07% of total household debt as of the end of 2023.

The analysis also showed that there are more than 700,000 registered BNPL merchants, the majority of whom operate online and have a strong presence in three sectors, namely food and restaurant, retail, and transportation. Notably, the proportion of physical or in-store merchants increased to 12% in 1Q2024.

CCOB is an independent authority set up in July 2021 and led by the Ministry of Finance, Bank Negara Malaysia and the Securities Commission Malaysia to drive the enactment of the Consumer Credit Act.