KUALA LUMPUR (March 21): The Consumer Credit Bill 2025, which is expected to be gazetted by the end of this year, will require buy now, pay later (BNPL) providers to report consumer borrowing data to credit rating agencies.

At present, BNPL players are not mandated to submit lending reports to credit ratings bureaus. However, the new bill will require BNPL providers to do so, while allowing them the flexibility to report to any credit agency of their choice, said Bank Negara Malaysia assistant governor Abu Hassan Alshari Yahaya, who also heads the consumer credit oversight board task force (CCOBTF).

“The idea is that, as this develops, we will have an ecosystem where BNPL customers’ credit records are part of the database,” he said at a press conference.

He added that requiring BNPL providers to submit lending reports to credit rating agencies would help consumers build their credit scores.

“If consumers have a good BNPL repayment history, this can be advantageous when they apply for housing or car loans,” he explained.

This development is particularly significant for younger consumers and those with limited or no formal credit history, as it helps to establish a credit profile.

As of December 2024, there were reportedly some 5.1 million active BNPL users, the majority of whom are young and working adults aged between 21 and 45. 

According to a CCOBTF survey, the majority or 73% of BNPL users are low-income earners (with a monthly income of less than RM5,000) and do not have access to other forms of personal financing, said Abu Hassan.

The survey was conducted online from August to September 2024, and received responses from 21,070 active BNPL users in Malaysia.

Meanwhile, Abu Hassan said the Consumer Credit Bill 2025 is important, given the surge in the BNPL payment method, which may cause harm to vulnerable consumers and increase the risk of uncontrolled debt among households.

There have been numerous complaints made by the public and calls for these credit service businesses to be regulated, he added.

As of December 2024, BNPL’s credit exposure or outstanding balance stood at RM2.8 billion, accounting for 0.2% of total household debt in the country.

In 2024, BNPL transactions totalled 149 million worth RM12 billion, almost doubling from the previous year. BNPL transactions stood at about 77 million worth RM6.3 billion in 2023.

Abu Hassan said this growth is expected to continue with increasing user familiarity on BNPL usage and the introduction of new BNPL schemes by e-commerce platform providers.

As of December 2024, there were 12 BNPL providers, including four Shariah-compliant ones.

Three major BNPL providers Shopee (SPayLater), Grab (PayLater by Grab) and Atome currently dominate the market with a share of more than 95% in terms of active BNPL account holders, volume and value of BNPL transactions.

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