KUALA LUMPUR: The incoming Consumer Credit Act will foster trust, transparency and more responsible credit usage, said Atome Malaysia’s head of BNPL (buy now, pay later), Danny Lim.
The legislation will also help enhance confidence in BNPL services and the industry, he added.
“In terms of what we focus on, in the short term, we want to make sure that we are supporting the regulators as they finalise the Bill. That’s our commitment, working with the regulators, seeking their advice, and also doing what’s required,” he told SunBiz.
Lim said Atome fully supports the introduction of the Act as many still don’t have access to bank credit. There are still underserved segments without access to regulated financial services, and we’re bridging that gap by supporting their short-term financing needs.”
Lim stressed that Atome aims to improve financial literacy and ensure users understand how to use BNPL as a budgeting tool and not for overspending.
He pointed to a survey by the Consumer Credit Oversight Board, which found that 73% of BNPL users earn less than RM5,000 per month and of which 69% say that this is their only source of financing as they don’t have access to or are not served by any bank.
However, Lim acknowledged that public perception of BNPL is negative, largely due to regulatory gaps and lack of awareness.
“And, of this, I think it’s important to ensure that we give public confidence, so these regulators’ view coming up to us is a good positive move, so that users are more confident in using this. That’s how we see it.”
Atome compliance lead Inderjit Singh said its internal frameworks are modelled on regulatory standards from other countries where BNPL is already supervised, such as Singapore and the Philippines.
“We’ve got no regulation here (Malaysia) now. Internally, whatever we develop, our risk management frameworks, our business strategies, compliance framework, is based on what we’ve done in other markets.”
Inderjit said when Malaysia’s Consumer Credit Act comes into force, only minor adjustments will be needed. “We already have something in place that should be sufficient from a regulatory perspective. Operationally, regulation won’t impact us too much.”
According to news reports, Deputy Finance Minister Lim Hui Ying said BNPL transaction volumes rose from RM83.8 million in the second half of 2024 to RM102.6 million in the first half of this year.
During the second reading of the Consumer Credit Bill 2025 in the Dewan Rakyat on July 21, Hui Ying said the surge in BNPL activity poses risks to consumers, especially low-income groups and those with poor financial literacy, who are vulnerable to unmanageable debt.
The total value of BNPL transactions increased 31%, from RM7.1 billion in second-half 2024 (H2’24) to RM9.3 billion in H1’25. The number of active BNPL accounts rose from 5.1 million at the end of last year to 6.5 million as of end-June.
To address this and protect the interests of credit consumers, the government will establish a statutory body known as the Consumer Credit Commission (CCC) under the Consumer Credit Act.
The commission, under the Ministry of Finance, will regulate currently unregulated sectors through a licensing and registration framework.
Hui Ying said the Bill is part of the government’s broader effort to introduce comprehensive consumer credit legislation and restructure Malaysia’s credit landscape. It is designed to address two major challenges – the presence of unregulated industry players and the fragmented oversight of the credit sector by multiple authorities.
“The Bill’s core aim is to protect consumer interests by ensuring proper conduct and responsible lending by all credit-related businesses, while promoting a fair, efficient, and transparent credit ecosystem,“ she said.
The Bill outlines the CCC’s responsibilities, including advising the government on national consumer credit policy, promoting fair and responsible market practices and granting licences based on a “fit and proper” evaluation.
“With this Bill, the government affirms its commitment to creating a safer credit ecosystem for the rakyat,“ said Hui Ying.
The deputy finance minister tabled the Bill for its first reading in the Dewan Rakyat on March 4. It was passed during the second reading through a majority voice vote on July 21.
The Consumer Credit Bill 2025 paves the way for regulating non-bank credit and credit service providers amid rising concerns over BNPL scheme proliferation.
Under the Bill, six types of businesses will come under the commission’s oversight. Three will require licences from the CCC to operate – BNPL providers, leasing companies and factoring services providers (including syariah-compliant offerings). In financial terms, factoring involves a business selling its unpaid invoices to a third party, or “factor”, at a discount to raise working capital.
The other three – debt collection, acquisition of non-performing loans or financing, and debt counselling or management services – must register with the CCC.
In total, 253 businesses across these six categories will be regulated.
Additionally, under the new law, the Ministry of Housing and Local Government will be responsible for licensing syariah-compliant pawnbroking (Ar-Rahnu) and syariah-compliant credit facilities.
