The focus of the CCOB in Phase 1, from 2024 to 2025, will be on non-bank credit providers and service providers that are currently unregulated. This includes businesses that offer Buy Now Pay Later (BNPL) services. Non-bank credit providers that are already regulated by a Regulatory and Supervisory Authority (RSA) will not be required to seek authorisation from the CCOB in this phase.

In assessing an application for authorisation, the CCOB will examine four criteria: organisational structure, shareholding composition, financial resources, and qualification and competencies of key personnel. The proposed regulations also require credit providers and credit service providers to have sufficient financial resources commensurate with the nature, complexity, and scale of their business. The proposed minimum financial requirement for BNPL firms is RM2 million of shareholder funds.

Industry players are expected to submit their data digitally via a one-stop portal that will take into consideration the different consumer credit business requirements. This will be an integrated complaints system driven by an Application Programming Interface (API) that will be freely accessible to industry players to ease regulatory costs and reporting obligations. The API-powered platform will also publish information on regulated industry players, allowing the general public to validate their credibility.

The CCOB is also seeking to ensure that advertisements and promotional material on credit or credit services are clear and not deceptive. Credit providers will have to conduct an affordability assessment on consumers before entering into an agreement with them or increasing the amount of credit provided. They will need to obtain information such as their financial means, outstanding debt obligations, and repayment history from reliable sources such as registered credit reporting institutions.

Interested parties and members of the public are invited to provide feedback and comments on the consultation paper to CCOB Task Force by 15 May 2023. To do so, you can visit the CCOB website to use the feedback form feature or email CCAConsultation@bnm.gov.my. This is an opportunity for the public to have a say in shaping the regulatory framework for credit businesses in Malaysia, which will help ensure responsible lending practices and protect consumers.

Source: https://ccob.my/wp-content/uploads/2023/04/Consultation-Paper-Pt-2_FINAL_ENG-1.pdf

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In Malaysia, there are several BNPL providers that have gained popularity among consumers, including MyIOU, Pay Later, and Atome. These platforms offer a convenient and flexible payment option for consumers, allowing them to pay for purchases in installments over a period of time.

According to a report by iPrice Group, a leading e-commerce aggregator in Southeast Asia, the BNPL market in Malaysia is projected to reach a market size of RM 5.8 billion (approximately USD 1.4 billion) by 2025. The report notes that the growth of the BNPL market in Malaysia has been driven by factors such as the increasing popularity of e-commerce, rising consumer demand for flexible payment options, and the growing number of BNPL providers in the market.

MyIOU is one of the leading BNPL providers in Malaysia, offering flexible payment plans to consumers for online and offline purchases. The platform has partnered with various merchants across Malaysia, including e-commerce platforms such as Shopee and Lazada, as well as physical retailers such as Watsons and Lotuss. According to MyIOU, the platform has seen a 150% increase in transaction volume in 2021, highlighting the growing demand for BNPL services in Malaysia.

Another popular BNPL provider in Malaysia is Pay Later, which allows consumers to pay for purchases in three installments over a period of time. Pay Later has partnered with a variety of merchants across Malaysia, including online fashion retailer Zalora and electronics retailer Senheng. According to Pay Later, the platform has seen a 400% increase in transaction volume in 2021, indicating the strong demand for BNPL services in the Malaysian market.

Atome is another BNPL provider that has gained popularity among consumers in Malaysia. The platform offers a flexible payment option for consumers, allowing them to split purchases into three interest-free installments. Atome has partnered with a variety of merchants across Malaysia, including online fashion retailer FashionValet and electronics retailer Harvey Norman. According to Atome, the platform has seen a 350% increase in transaction volume in 2021, highlighting the strong demand for BNPL services in Malaysia.

In conclusion, the BNPL market in Malaysia is rapidly growing and is projected to reach a significant market size in the coming years. With the increasing popularity of e-commerce and rising consumer demand for flexible payment options, BNPL providers such as MyIOU, Pay Later, and Atome are well-positioned to continue growing and capturing a larger share of the Malaysian market.

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