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The Singaporean government has reinforced its stance on the regulation and oversight of buy now, pay later (BNPL) schemes as their popularity grows among young consumers in the city-state.
In a parliamentary response, the trade and industry minister Alvin Tan outlined the measures that are in place to mitigate potential financial risks associated with BNPL usage.
BNPL is a growing payment method in Singapore, thanks to the use of companies such as Atome and Grab.
In 2023, Singapore consumers reportedly spent S$3.4bn online and in-store using BNPL solutions from third-party providers, banks and retailers, and it is estimated that BNPL will account for two percent of total spending in the country by 2027.
Responding to a query from MP Yio Chu Kang, Tan said that BNPL transactions remain a small fraction of consumer payments, accounting for just one percent of total credit and debit card payments in the first half of 2024.
However, he added that, given the increasing appeal of BNPL platforms to young consumers, the government is maintaining a cautious approach.
Although BNPL firms are not directly regulated by the Monetary Authority of Singapore (MAS), they adhere to a BNPL Code of Conduct developed under MAS guidance. The code, established to reduce debt accumulation risks and protect users, sets strict eligibility and credit assessment requirements.
“The credit assessment includes conducting income checks and credit checks against the BNPL credit bureau, which includes information on BNPL users’ outstanding balances, missed payments and delinquencies amongst accredited firms,” Tan said.
He also pointed out that the MAS does not require financial institutions to include outstanding BNPL amounts when computing the total debt service ratio (TDSR) requirements, recognising that BNPL outstanding amounts tend to be relatively small, with safeguards to prevent debt snowballing.
Tan also said that the government is placing an emphasis on financial education. For example, the national MoneySense programme offers resources on budgeting and responsible spending, and financial literacy is embedded in the school curriculum.
A growing issue
BNPL schemes are gaining more attention in Singapore's Parliament.
Tan's comments follow a February 2025 parliamentary update from Deputy Prime Minister Gan Kim Yong, covered by Vixio, confirming that there had been no breaches of the BNPL Code of Conduct since its introduction in 2022.
It is likely becoming a pertinent topic among MPs due to fears about rising consumer debt, particularly among young people who may lack financial literacy.
Lawmakers in Singapore are raising the same concerns over debt traps, financial hardship and long-term credit issues that have been noted by their counterparts in other countries, such as the Netherlands, the UK and the US.
