A New Era for Consumer Credit - The recently passed Consumer Credit Bill (CCB) in the Dewan Rakyat marks a pivotal shift in Malaysia's financial landscape. For the first time, there will be comprehensive regulation covering consumer credit services, with Buy Now, Pay Later (BNPL) taking center stage.
This comes at a time when more Malaysians are turning to alternative financial solutions to manage their daily cash flow. Rising living costs and unexpected financial shocks have made BNPL a lifeline for many. A survey of over 40,000 BNPL users revealed that 81% relied on these services to weather financial challenges, highlighting just how critical safe and reliable credit options have become.
Why Oversight Matters
For many Malaysians, traditional credit facilities remain out of reach. This could be due to a lack of formal banking documentation, irregular income streams, or simply limited access to financial services. In such cases, people often resort to unregulated or illegitimate credit sources, which expose them to high risks of debt traps.
In fact, 63% of BNPL users said they turn to the service to avoid relying on illegal credit options. With BNPL now being drawn into the regulatory framework under the CCB, users will have greater confidence in using these services safely.
Building a Path to Financial Inclusion
One of the most impactful elements of the CCB is its requirement for BNPL providers to report user credit data to credit bureaus such as CTOS. This development has two major benefits:
The Consumer Credit Oversight Board (CCOB) estimates there are already more than 5.1 million BNPL account holders in Malaysia. Yet, many of these individuals remain invisible to current credit reporting systems. With the new law, they can finally be integrated into the financial ecosystem.
Prioritising Consumer Protection
A key feature of the CCB is its emphasis on affordability assessments. This means BNPL providers must evaluate users' financial capabilities before extending credit. The goal is to provide personalised credit limits that prevent over-indebtedness.
Encouragingly, CCOB data shows a positive trend: overdue BNPL accounts have already dropped from 6% in 2023 to just 3.4% by the end of 2024. Stronger oversight is expected to accelerate this progress further.
A Growing Industry in Need of Guardrails
As of June 2025, Malaysia has 16 active BNPL providers, each targeting different consumer segments with unique value propositions. The industry's growth underscores the need for regulation to keep pace with innovation.
The CCB sets clear boundaries to curb exploitative practices, ensuring that only responsible providers thrive. This balance between innovation and protection is key to building trust in the BNPL ecosystem.
Moving Forward: Safer and More Inclusive Finance
The enactment of the Consumer Credit Bill signals that Malaysia is serious about protecting its people while supporting financial innovation. For consumers, this means safer options, stronger protections, and opportunities to build a healthier financial future.
As long-standing BNPL players like ShopeePay note, the legislation is a welcome step forward. By creating an inclusive, transparent, and regulated environment, the CCB ensures that BNPL is not just a quick fix, but a stepping stone toward long-term financial empowerment for Malaysians.
