Nature of Buy Now Pay Later (BNPL) schemes

How does MAS view Buy Now, Pay Later (BNPL) schemes?

MAS does not directly regulated BNPL schemes in Singapore. Nevertheless, it is assessing whether a regulatory framework is necessary in the future. 

According to MAS (Parliamentary Replies)

last revised on 05 October 2021

2.  Currently, BNPL schemes do not pose significant risk to household indebtedness. They are not yet widely used relative to other payment methods. For example, industry estimates put the total value of BNPL transactions in 2020 at around $114 million. This is a very small fraction of the $92 billion in credit and debit card payments over the same period.

4.  MAS is nonetheless assessing whether a regulatory framework is necessary to guide the evolution of BNPL schemes as they become more widely used in Singapore. This could include adoption of fair dealing practices by BNPL schemes. For instance, clear disclosure at the point of account opening is helpful in ensuring that consumers are fully aware of the late fees chargeable if they do not pay on time. MAS has been engaging BNPL providers and has been reviewing the experience in other jurisdictions where such schemes are more prevalent.

FinReg business tip

The increasing popularity of Buy Now, Pay Later schemes may have some overlaps in credit regulations, however MAS has clarified that it does not directly regulate this sector. This may change in the future depending on the widespread adoption of BNPL.