SINGAPORE – While the total amount of "Buy Now Pay Later" (BNPL) transactions in Singapore increased to S$440 million last year compared to S$114 million in 2020, it is still "much less than 1 per cent" of total credit and debit card payments last year.
Senior Minister Tharman Shanmugaratnam noted this in his written reply to a question by Nee Soon Member of Parliament (MP) Derrick Goh in Parliament on Monday (12 September).
Goh had asked for the current total value of BNPL loans in Singapore and the growth rate of these loans in the past 12 months. He also enquired whether an industry code for effective industry self-regulation will be developed and 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.
BNPL code on track
Tharman, who is also the minister in charge of the Monetary Authority of Singapore (MAS), added that the code of conduct (BNPL Code) for BNPL providers here is on track to be launched this year. The code is being developed by a Singapore FinTech Association working group, under the guidance of the Monetary Authority of Singapore (MAS).
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," Tharman said. "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."