Shariah Compliance Aspects Of BNPL Need Deeper Examination - AKPK

By Harizah Hanim Mohamed

KUALA LUMPUR, Dec 5 (Bernama) -- The contract structure and operations of companies offering ‘Buy Now Pay Later’ (BNPL) services need to be examined carefully to obtain a clear picture of the Shariah compliance status of such transactions.

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Head of Research Development at the Credit Counselling and Debt Management Agency (AKPK) Mohammad Mafrukhin Mokhtar said several elements related to Shariah compliance, specifically the structure of purchase contracts in the new BNPL financing scheme, still require deeper scrutiny. 

He said the contract structure and operations of companies offering BNPL must be thoroughly reviewed to gain a clear understanding of the Shariah compliance status of these transactions.

“The items purchased may be halal, but the contract structure and the company that handles it need to be examined. It is not yet worrying, but warrants attention,” he said after the launch ceremony of the 2025 Islamic Financial Literacy Study Report, conducted jointly by AKPK and the Institute of Islamic Understanding Malaysia (IKIM) yesterday.

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Earlier, the Shariah Advisory Council of Bank Negara Malaysia (BNM) in its 220th meeting decided that BNPL facilities are permissible, in line with the Bank Negara Malaysia Act 2009.

However, the facilities must be structured based on appropriate Shariah contracts to safeguard the rights and responsibilities of the contracting parties.

According to Mohammad Mafrukhin, the lack of comprehensive data at present makes it difficult to assess the final evaluation of BNPL’s potential risks, thereby indicating the need for further research to understand consumer behaviour and its implications within the Islamic financial framework.  

He said initial observations show that most BNPL transactions are driven by the purchase of essential products rather than uncontrolled spending.

“We found that most BNPL transactions involve the purchase of necessities. This shows that consumers genuinely need these items but may not have the finances at that time. BNPL facilities allow them to buy before payday,” he said.

Payment patterns also remain stable, with low default rate.

“Most users make payments online. Although there are outstanding balances, the level of payment failure is not concerning,” he added.

Meanwhile, IKIM deputy chairman Datuk Dr Mohd Yusof Othman cited a BNM report which revealed that 61 per cent of Malaysians face difficulties and some are entirely unable to save at least RM1,000 for emergencies.

“This situation reflects the financial pressures faced by the people, especially due to high monthly commitments that limit their capacity to save. Overspending habits, exposure to easy offers like BNPL, and the tendency to take financing without long-term planning further worsen the situation,” he said.

He added that these issues highlight the fragility of personal financial management foundations among some segments of society.

-- BERNAMA