Desmond, a 26-year-old digital marketing executive, shared his struggle with Buy Now, Pay Later (BNPL) services. He found himself in over RM15,000 debt within two months and had to resort to credit card balance transfers to manage his cash flow. This sheds light on the potential pitfalls and challenges of BNPL services, revealing how convenience can quickly lead to overspending.
BNPL services have become popular in Malaysia, particularly due to the growth of ecommerce and the country’s tech-savvy consumer demographic. They provide an alternative to traditional credit sources, attracting those who may not qualify for traditional bank credit facilities.
Amy Seok, from the Malaysia Literacy in Financial Education Association, explained that BNPL services offer an alternative to traditional credit sources with more lenient approval criteria, appealing to consumers who do not qualify for traditional bank credit facilities.
Emir Kamaruzzaman, a content creator, also highlighted the lower barrier of entry for BNPL services compared to credit cards, making it an attractive option for many Malaysians.
However, despite their popularity, BNPL services come with their own set of challenges. Users often find it difficult to monitor their expenses, leading to impulsive spending and overspending. Consumers may experience an illusion of affordability, making it challenging to recognize their actual financial needs for specific goods.
On the other hand, Jane, a 29-year-old chemical engineer, views BNPL services as a valuable ally for managing unforeseen expenses. She emphasized the importance of holding oneself accountable and maintaining clear records of BNPL transactions.
Experts recommend responsible use of BNPL services and stress the importance of setting a realistic budget and tracking spending habits. They also called for closer control and effective regulation to promote responsible financial behavior and safeguard consumer interests in the BNPL sector.
Before the regulatory framework is unveiled, consumers are urged to adopt a cautious stance on BNPL services, citing the need for consumer understanding and financial education. While BNPL payments can be beneficial when used responsibly, it’s crucial for users to assess their financial situation and make informed decisions.
