Debated in Parliament on 12 Sep 2022.
Mr Derrick Goh asked the Prime Minister (a) what is the current total value of "Buy Now Pay Later" (BNPL) loans in Singapore; (b) what is growth rate of BNPL loans in the past 12 months; (c) whether an industry code for effective industry self-regulation will be developed; (d) whether the Government will consider requiring BNPL providers to report such loans to the Credit Bureau for financial players to properly assess consumers’ credit worthiness; and (e) what other measures are being considered to prevent over-indebtedness by consumers and over-lending by BNPL providers.
"Buy Now Pay Later", or BNPL, transactions amounted to $440 million last year. This is up from $114 million in 2020. However, BNPL transactions remain very small compared to other means of consumer payment. They were much less than 1% of total credit card and debit card payments last year.
The Code is on track to be launched this year.
The BNPL Code will limit the extent of debt accumulation by consumers. Measures under consideration include suspending users from making further BNPL purchases once a payment is overdue, not charging compounding interest on outstanding amounts, and requiring a user creditworthiness assessment before the user can exceed a stipulated credit cap with a BNPL provider. BNPL providers are also exploring sharing with one another information on customers’ outstanding amounts and delinquency status to facilitate better assessments of their customers’ creditworthiness.
MAS will continue to monitor developments in the BNPL sector and work with the industry to address any risks to consumers.
PAPERCUTS