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ONLINE shopping has become effortless, and many e-commerce platforms have made “buy now, pay later” (BNPL) services a familiar option for consumers. With just a few taps, shoppers can buy the latest gadgets, fashion, or beauty products immediately while deferring payment over weeks or months. While convenient, experts warn that BNPL is quietly encouraging financial challenges, especially among young Malaysians.

As of June 30, total credit involved in BNPL schemes in Malaysia stood at approximately RM3.8bil, representing around 0.2% of total household debt.

There are about 6.5 million active BNPL account holders, with a significant portion under 30 years old. Nearly 169,000 users (2.6 % of all BNPL users) have overdue balances, totalling RM121.8mil, or 3.2 % of outstanding BNPL debt. In the first half of 2025 alone, the total value of BNPL transactions exceeded RM9.3bil, illustrating the rapid growth of this credit option.

Although total BNPL debt is still a small fraction of household liabilities, the figure highlight a worrying trend: Young consumers increasingly rely on BNPL for daily and discretionary spending, often without understanding the consequences.

BNPL encourages impulsive purchases, making spending feel “free” in the moment, which can lead young adults to buy items they do not truly need, especially trendy gadgets, fashion, or lifestyle products. 

But small deferred payments can quickly accumulate into hundreds or thousands of ringgit in debt, and many users underestimate their total obligations until they become overwhelming.

Between 2020 and 2025, 5,272 people aged 34 and under declared bankruptcy in Malaysia, with financial vulnerability from digital spending and easy access to credit, including BNPL, cited as a contributing factor.

Financial experts are concerned about the long-term impact. Nor Fazleen Zakaria, Education and Outreach general manager at the Credit Coun-selling and Debt Management Agency has been reported as saying that BNPL “should never replace proper financial planning ... do you really need that item right now?”

She urged consumers to pause and consider long-term implications, warning that over-reliance on BNPL can lead to accumulated debt and damaged credit scores, which can also affect mental health.

Missing payments can result in late fees, interest charges, or even collection actions. Further-more, BNPL usage is increasingly reported to credit bureaus, meaning defaults can negatively impact credit scores and affect future loans, mortgages, or even job opportunities.

Multiple BNPL accounts or frequent use can leave users over- leveraged and struggling to cover essentials such as rent, education fees, or living expenses. The constant reminders of unpaid balances and mounting debt can also cause stress and anxiety.

Experts also warn that BNPL gamifies shopping. Flash sales and limited-time offers combined with deferred payments promote overconsumption, encouraging instant gratification at the expense of long-term financial stability.

While no widely reported cases in Malaysia link BNPL as the sole cause of bankruptcy, international experiences highlight the risks. In the United States, consumers have accumulated tens of thousands of dollars in BNPL debt alongside credit card debt and other loans, with unpaid amounts sometimes sent to collection agencies, contributing to the consumer’s financial distress.

Research shows BNPL users are more likely than traditional credit users to face serious debt problems, and in the United Kingdom, surveys reveal that misunderstandings of BNPL obligations have led to financial strain and defaults.

Experts warn that without financial literacy and responsible borrowing habits, BNPL can trap young consumers in cycles of debt that threaten long-term stability. Without awareness and responsible spending, what seems like convenience today could become financial stress tomorrow.

Dr Asraf Mohamed Moubark and Dr Hairi Mohd Zaman

Department of Electrical, Electronic, and System Engineering

Faculty of Engineering and Built Environment, Universiti Kebangsaan Malaysia

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