Earlier today, the Monetary Authority of Singapore (MAS) posted a letter addressed Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS. An MP, Derrick Goh, inquired about buy now – pay later (BNPL) activity in the country. Responding to the inquiry, the Minister shared that:
“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.”
While displaying substantial growth, there appears to be sufficient concern regarding the possibility of abuse that MAS is collaborating with the Singapore Fintech Association to develop a BNPL Code of Conduct. These guidelines for BNPL activity are expected to be completed before the end of the 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 is expected to monitor BNPL growth and address any risks that may emerge.
Singapore is the leading Fintech hub in Asia, a fact that is boosted by policymakers working closely with Fintechs to enable innovation.