Buy Now Pay Later methods to remain hot in Malaysia

The buy now pay later (BNPL) payment industry has recorded a strong growth in Malaysia over the past year and is projected to have a steady growth in the coming year as well.  According to the "Malaysia Buy Now Pay Later Business and Investment Opportunities Databook”, the BNPL payments in the country are expected to grow by 23.6% on an annual basis to reach US$2,298.6 million in 2023.

BNPL schemes allow users to make instalment payments at a zero-interest rate over a fixed period. The BNPL payment industry in Malaysia has recorded strong growth over the last four quarters, supported by increased ecommerce penetration. Medium to long term growth story of BNPL industry in Malaysia remains strong.

BNPL payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 12.9% during 2023 to 2028, said the report. Meanwhile, the BNPL Gross Merchandise Value in the country will increase from US$1,860.0 million in 2022 to reach US$4,221.7 million by 2028.

Clearly the trend is here to stay. Most recently, the Consumer Credit Act (CCA), which seeks to promote healthy spending and prevent them from falling into debt traps also announced that it will be regulating the BNPL platforms under Phase 1 of the act.

Global head of payment business at Payment Asia, Sam Leung told A+M in a previous interview that BNPL has bigger potential in countries that have low credit card penetration and limited access to formal credit. Hence, across APAC, BNPL is still welcome in countries such as Malaysia. 

Meanwhile, just last year, BNPL player Ablr recently expanded into Malaysia after starting up in Singapore in 2017 led by Amanda Chin, Ablr's CEO. She had then told A+M in an interview that its expansion into Malaysia was driven by the country’s “great potential for growth”, as a highly digital-savvy nation with a population that has a high mobile penetration rate.

More importantly, the brand has seen increasing use of digital payments and the desire for faster, safer, and more convenient methods of payment. As such, these characteristics of the Malaysian market enable Ablr to come in and provide its services.

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