KUALA LUMPUR: SeaMoney Capital Malaysia Sdn Bhd (SeaMoney Malaysia) welcomes the forthcoming Buy Now, Pay Later (BNPL) regulatory framework, which will provide clarity to the industry, observers and commentators while preventing irresponsible practices by “bad apples”.
“We are excited for the regulation to be passed in Parliament, as it will clarify many uncertainties surrounding the BNPL industry in Malaysia. There are a lot of ‘what-ifs’ and potential fears that are quite unfounded,“ SeaMoney Malaysia and ShopeePay head Alain Yee told SunBiz in an exclusive interview.
“With the regulation, all of this will be clarified, and there will be strong guidelines for all players to adhere to,“ he said.
SeaMoney Malaysia is Malaysia’s largest BNPL provider under Sea Group and is the holding company for online shopping platform Shopee.
Yee said he believes that the major players in Malaysia today are operating responsibly. “The incoming regulation will solidify that all these players, including SPayLater (SeaMoney’s BNPL product), are abiding by these rules and regulations.”
He stressed that BNPL in Malaysia is a responsible and sustainable business model, at least as it is structured in Malaysia compared to other countries. “I think users in Malaysia are unlikely to go bankrupt because we run it in a very conservative manner,“ he said.
Yee explained that none of the BNPL players in Malaysia, including SPayLater, charge compounding interest on overdue balances.
“We charge a flat late fee of RM10 if you are overdue. For example, if your billing due date is on the first of the month, at 12am on the second, your line of credit will be completely frozen if you have yet to settle whatever is due on the first.
“So there’s no further accumulation of debt. If users want to access the service again, they must repay what was overdue or due on the first, plus the late fee. Of course, there could be further repercussions, such as a reduction in credit limit,“ he said.
BNPL in Malaysia is very different from what has been reported in literature from other countries, especially in the West and Australia, where business practices can be less sustainable, Yee said. “In those countries, they charge very high fees to users and penalise users on outstanding overdue amounts.”
Yee pointed to current statistics published by Bank Negara Malaysia indicating that BNPL makes up less than 0.1% of household debt. “Most household debt comes in the form of housing, vehicle and personal loans,“ he added.
He noted that these figures do not include borrowings from the informal economy, such as illegal moneylenders or loans from friends and family.
Yee disclosed that Seamoney Malaysia’s surveys indicated that after using SPayLater, borrowing from friends and family fell by 50%, and reliance on mone lenders decreased by 40%.
“We’re bringing more individuals into what you could call the more formal economy, not to say that the previous one was entirely informal,“ he said.
Yee said they aim to promote responsible borrowing by encouraging users to utilise the service for necessities, not wants. “If you’ve seen all our marketing communications and messaging, we strongly espouse responsible borrowing.”
He mentioned that the company collaborates with merchant partners, including petrol stations and supermarkets, to promote responsible usage. “Many users turn to SPayLater for short-term financial gaps, such as emergencies.”
Repayment rates are strong, Yee said, with more than 97% of users paying on time (according to Bank Negara statistics), surpassing credit card performance in Malaysia.
“While risks are associated with any financial product, the benefits of SPayLater outweigh these concerns. Currently, BNPL is a small contributor to household debt, and we will continue to promote responsible usage within the community. For example, when users need items for their baby and don’t have the cash to pay upfront, they turn to SPayLater. They find it very useful, and it is almost like a lifeline for them at that point in time.”
According to Yee, over half of their user base earns between RM2,000 and RM5,000 a month and about 45% of SPayLater users are under the age of 30, with the remainder being over 30.
He added that many individuals can access credit cards, but SPayLater provides a more accessible, transparent service with lower fees. Its non-compounding aspect makes it syariah-compliant.
“I think there’s a demand for this as it better matches many individuals’ use cases,“ he said.
