Malaysia Moves to Regulate BNPL and Non-Bank Lenders Through Consumer Credit Commission
Malaysia is moving to strengthen oversight of non-bank credit providers with the establishment of a Consumer Credit Commission, a step intended to enhance consumer protection as buy now pay later (BNPL) services expand. According to Bank Negara Malaysia (BNM), the new regulatory body will bring previously unregulated credit providers under a formal supervisory framework. The central bank outlined the development in its Financial Stability Review for the second half of 2025, noting that BNPL usage has grown rapidly even though it still represents a small share of overall household debt.
New oversight framework for non-bank credit providers
BNM said the planned commission would regulate and supervise non-bank credit and credit service providers that previously operated outside a comprehensive regulatory structure. This includes companies offering BNPL services, which have expanded quickly as consumers adopt alternative payment and short-term credit options.
The central bank said placing these providers under a formal framework is expected to strengthen consumer protection and improve regulatory oversight. The move aligns with Malaysia’s broader efforts to support responsible digital financial innovation while safeguarding users of emerging payment models, as highlighted in initiatives promoting secure and inclusive digital payment innovation in Malaysia.
BNPL usage expanding but remains a small share of household debt
BNM reported that BNPL exposures remain relatively limited within Malaysia’s financial system. Outstanding BNPL balances accounted for 0.3 per cent of total household debt, although the central bank noted that the pace of expansion warrants continued monitoring.
Transaction activity increased significantly in the second half of 2025. The total number of BNPL transactions rose to 140.3 million, up from 102.6 million in the first half of the year. Over the same period, the value of BNPL transactions increased to RM11.9 billion from RM9.3 billion.
Outstanding BNPL debt also grew, reaching RM4.9 billion by the end of December 2025, compared with RM3.8 billion recorded in June 2025. BNM attributed this growth largely to a rising number of users, with active BNPL accounts increasing to 7.5 million from 6.5 million over the same period.
Overdue debt levels remain stable
Despite the rapid increase in transactions and users, the share of overdue BNPL debt has remained stable. As of December 2025, overdue balances accounted for 3.2 per cent of total BNPL debt, unchanged from June 2025.
This level is also lower than the six per cent recorded during the early phase of BNPL adoption in March 2023. BNM indicated that while the current risk profile appears contained, the continued expansion of BNPL schemes remains an important area of surveillance for the central bank.
