This article first appeared in Digital Edge, The Edge Malaysia Weekly on September 8, 2025 - September 14, 2025

In an industry-revolutionising move, the Consumer Credit Bill (CCB) was recently passed in the Dewan Rakyat, opening the door for holistic regulation over consumer credit services, with buy now, pay later (BNPL) being the most prominent.

This couldn’t have come at a better time as more Malaysians seek out financial services to better manage their cash flow or seek a line of credit during times of need. In speaking to more than 40,000 BNPL users, we found this to be especially true, as more than 81% said they relied on BNPL to weather financial shocks, underscoring the need for reliable and safe credit options.

As a BNPL provider, ShopeePay welcomes the enactment of the CCB and believes better oversight of the industry can only bring about a more inclusive and safer financial environment for everyday Malaysians.

For a portion of Malaysians, traditional credit offerings remain out of reach, either due to a lack of formal documentation, access to banking services or irregular incomes for those in the informal sector.

Consequently, these underserved groups may seek illegitimate credit services as an option when their financial needs cannot be met, exposing themselves to greater financial risk and possibly falling further into debt. We found that 63% of BPNL users utilise the service to avoid relying on illegitimate credit in times of need.

Under the CCB, BNPL providers are required to report user credit data to relevant credit bureaus, such as CTOS.

Here, the upcoming regulation serves a dual function for underserved consumers. First, by giving them confidence and safety to use BNPL in times of need. Second, the use of BNPL services would allow these consumers to build up legitimate credit histories, assisting them in their long-term financial development.

With the CCOB (Consumer Credit Oversight Board) estimating that there are more than 5.1 million BNPL account-holders, the reach of consumer credit is vast. Yet, these consumers remain unaccounted for by current credit reporting standards.

Upon enactment of the law, non-banking institutions can play a part in integrating their users into the credit reporting system, allowing the users to build reliable financial records, and develop the underserved communities into a more credit-visible demographic.

From a consumer-risk perspective, the requirement to conduct affordability assessments impels service providers to review and better understand the financial needs and capabilities of their diverse user base.

In doing so, the consumers can be offered more personalised credit limits, pre-emptively ensuring they do not fall into over-indebtedness. This plays a part in addressing and alleviating the long-held concern of users unintentionally going over budget and being unable to manage their credit commitments.

Currently, CCOB’s data reflects a healthy downtrend of BNPL users who are overdue over the year, from 6% in 2023 to 3.4% by 4Q2024, showing a growing understanding of credit usage among the users, a trend we can expect to improve upon further regulation.

With 16 BNPL players operating in Malaysia as at June 2025, the industry continues to grow, with providers catering to different niches and offering different value propositions.

At a time when consumers require accessible lines of credit to weather difficult times, industry regulation has never been more important.

With firm oversight of industry-wide conduct, the CCB scrutinises and takes a stand against business practices that may exploit consumers. The key to a healthy industry is filtering malpractices, limiting bad actors and ensuring that only secure services may enter the market to serve consumers.

As a long-standing BNPL provider, we welcome the government’s proactive efforts to support and enhance modern financial developments with the rakyat in mind. With this regulation, we’re taking the right step forward as an industry to build a safer, more inclusive financial system for all Malaysians.

Alain Yee is CEO of ShopeePay MY, e-commerce giant Shopee’s digital wallet provider

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