CONSUMER CREDIT COMMISSION STRENGTHENS BNPL ECOSYSTEM, USER PROTECTION LEVEL - EXPERTS

By Suraidah Roslan dan Lucia Terey John

KUALA LUMPUR, April 1 (Bernama) -- The establishment of the Consumer Credit Commission is expected to enhance access to credit in a more structured and secure manner, particularly in the Buy Now, Pay Later (BNPL) segment, which has previously been less comprehensively regulated.

Universiti Teknologi Mara (UiTM) Sabah economics lecturer Herniza Rozanne Marcus said that the existence of a clearer licensing framework, monitoring, and guidelines will ensure that non-bank credit providers are subject to stricter compliance standards, including transparency in charges and borrower eligibility assessment.

"In the short term, access to credit may be somewhat limited due to the need for providers to adjust their operations to the new regulations.

"However, in the long term, this step is expected to enhance consumer and investor confidence, thereby supporting the growth of a more sustainable, stable, and integrity-driven non-bank credit market," she told Bernama.

Bank Negara Malaysia (BNM), through the Financial Stability Review for the second half of 2025 (2H 2025), today said that the establishment of the commission is a timely and important step in protecting consumers through the regulation and supervision of credit service providers and non-bank credit.

According to the report, although the cumulative exposure of BNPL remains small at 0.3 per cent of the total household debt, the rapid growth of this segment requires close monitoring.

This is because in 2H 2025, the number and value of BNPL transactions increased to 140.3 million transactions worth RM11.9 billion, compared to 102.6 million transactions worth RM9.3 billion in 1H 2025.

Herniza said that stricter regulations on BNPL providers and non-bank credit could potentially slow down digital financial innovation, especially for new players who rely on flexible and technology-based business models.

"Higher compliance costs, licensing requirements, and stringent regulatory processes can be entry barriers and limit the space for innovation. However, this regulation does not necessarily hinder if implemented in a balanced manner," she said.

She said Malaysia could adopt a proportionate regulation approach, where the level of regulation is adjusted according to the risk level of a product or provider.

In addition, Herniza said that risk-based monitoring and close cooperation between regulators and the industry are crucial to ensure that innovation continues to thrive in a safe environment.

"At the same time, emphasis on consumer protection, transparency of charges, and responsible credit practices is crucial to ensure the sustainable development of fintech (financial technology) and to avoid long-term financial risks.

"The balance between innovation and protection is the key to developing a healthy digital credit ecosystem in Malaysia," she also said.

Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid said that the establishment of the Commission will further streamline regulation and enforce the Consumer Credit Act.

"Through this Commission, the rights of users and platform providers will be protected because both parties can use the legal framework to resolve any issues related to user credit," he said.

 In addressing the debt burden caused by uncontrolled BNPL usage, Mohd Afzanizam said that financial literacy programmes need to be increased so that consumers, especially the youth, are always aware of their choices.

Pertubuhan Mesra Pengguna Malaysia (PMPM) deputy president Azlin Othman believes that the establishment of the commission is timely to ensure that the BNPL industry develops in a more organised and responsible manner.

"The Commission not only provides clarity to service providers in terms of guidelines and compliance but also enhances confidence in the overall consumer credit ecosystem.

"At the same time, consumers will receive better protection through transparent terms, control over hidden charges and more prudent credit practices," she said.

Azlin added that the Commission is also capable of curbing the risk of users falling into excessive debt by tightening the assessment of repayment ability, in addition to monitoring the use of BNPL in a layered manner.

-- BERNAMA