Malaysia’s BNPL Growth Sparks Credit and Debt Concerns

Malaysia’s Parliament tabled the Consumer Credit Bill (CCB) on March 4, 2025. This long-overdue legislation aims to bring buy now, pay later (BNPL) services under formal regulation. It proposes the establishment of a Consumer Credit Commission (CCC) to oversee providers, enforce fair lending practices, and ensure consumer protection.

The move comes amid a BNPL boom. As of late 2024, Malaysians made over RM7.1 billion in BNPL transactions. Over 5 million users now use these services, most earning less than RM5,000 monthly. The growth is rapid, but so are concerns about debt, overspending, and financial literacy.

One notable case is KFC Malaysia’s collaboration with Boost Bank to launch QSR PayFlex. This Shariah-compliant BNPL offering lets customers split fast food payments into three installments. While marketed as inclusive, critics say it normalises short-term debt for non-essential purchases.

Internationally, regulators have stepped in. In the United States, BNPL giants like Klarna, Afterpay, and even DoorDash now offer installment payments. The Consumer Financial Protection Bureau (CFPB) has begun investigations, citing risks of hidden debt, impulsive spending, and limited accountability.

BNPL has its upsides. It provides easy access to short-term credit, often interest-free. For many, it’s more approachable than a credit card. But it also opens the door to overspending and silent debt accumulation — especially in a loosely regulated environment.

This trend draws comparisons to the 2008 subprime mortgage crisis, where easy credit and poor oversight led to global financial collapse. While BNPL is smaller in scale, the patterns are familiar: mass adoption, weak regulation, and rising risk.

What’s striking is the current Madani government’s silence. Once vocal critics of household debt, they now back fintech-driven lending models with little resistance. The irony is hard to miss.

The CCB is a step forward. But without firm enforcement and serious public education, the Malaysian government may be inviting the same crisis it once promised to prevent.