What is Buy Now Pay Later (BNPL)? & How to Use it in Malaysia
buy now pay later malaysia

What is Buy Now Pay Later (BNPL) & How to Use it in Malaysia

Many consumers have started switching to cashless payment methods especially during the pandemic because it’s a much safer option as compared to cash payments. The digital payment trend has helped accelerate the growth of digital development in Malaysia making payment options far more convenient and seamless.

The Buy Now, Pay Later (BNPL) service is no stranger in the digital payment landscape. Other than the conventional payment methods like credit cards and personal loans, this short term financing option might be the next future of shopping.

Every type of financing has its pros and cons, but the best choice for you would depend on your needs and financial ability to repay the debt. So, the question is, “Is it worth it to use Buy Now Pay Later BNPL?” Or is it better to choose other financing options such as a personal loan or credit card? In this article, we would highlight how Buy Now Pay Later (BNPL) works in Malaysia and its differences with personal loans and credit cards.

Service car now, pay later.

Financing options from 3 or 6 months up to RM5000.

What is Buy Now, Pay Later (BNPL)?

Buy Now, Pay Later (BNPL) is categorised as a short term financing or known as installment loans. The introduction of the Buy Now, Pay Later service in Malaysia is considered a timely and beneficial payment method that not only enables businesses to sustain their growth during the pandemic; but also allows customers to split the bigger purchase amount into smaller bite-size monthly installment payments, which typically have 0% interest. Usually, it works as follows:

  1. After deciding to complete your purchase using the BNPL service, you need to fill up some information about yourself.
  2. If this option is approved by your selected BNPL platform, they would help you to ‘pay’ your purchase first to the seller in full.
  3. Then, you would need to pay to the BNPL platform (not seller) through credit card, debit card or bank account until you have finish paying up your installments for that purchase.
  4. The installment period would depend on your selected BNPL platforms. Usually, it is within 3 or 6 months.

Benefits & Disadvantages of Buy Now, Pay Later (BNPL)


  • Easy to use. You can apply online and your application will be approved immediately.
  • Pay for your purchases in installments, usually without any interest charged.
  • Receive approval without any strict credit checking (Alternatively, there are also financing platforms that do not require you to have an excellent credit score just to approve your financing)
  • Pay automatically. You don’t need to deposit any cash via ATM or log into your online banking account just to make a monthly repayment. In fact, your monthly installment would be deducted through the payment method that you have first chosen when you make your first repayment.


  • Because you don’t need to pay up in full, so it is much easier for you to overspend and exhaust your budget.
  • High late payment charges.
  • This can affect your credit score. In case you missed out a lot on your payments, the merchants have the right to send your late payment record to credit reporting agencies.

  • Not all seller or merchants use accepts or use this payment method.
  • No reward points or cashback. Currently, almost all BNPL platforms do not offer reward points or cashback as compared to credit card.

Tips Before Considering to Use Buy Now, Pay Later (BNPL)

1. Don’t overextend your finances

Make sure you have a clear understanding of your finances and see if it fits with your budget or spending. Just because you are eligible to use any BNPL platforms, does not mean that you should make any hasty decisions.

2. Understand your credit report

All of your debt would be recorded by credit reporting agencies. So, this credit report would determine your credit repayment behaviour – whether you pay up on time or miss out on payments. If you have a history of late repayments and the BNPL platform has reported it, this could cause damage to your credit history. Generally, there are two types of credit report that you need to know which is CTOS and CCRIS. For further explanation, read up on What is CCRIS and CTOS and learn how to read your credit report.

3. Make early repayments

You may be blocked from future purchases until you have settled the payment, and it is even possible for the debt collector to ask from you if you fail to repay.

As lenders have different fees and policies, it is important to carefully review the terms and conditions of BNPL before signing up for one. In addition, the bank may charge a late fee if you sign up for an automatic repayment via a debit card or bank account that does not have sufficient funds.

4. Lesser protection

The BNPL financing at this stage does not have any consumer protection as compared to credit card. For example, BNPL companies does not offer the same dispute protection as credit cards if items purchased are damaged or fraudulent.

Returning an item sometimes can be a troublesome process. BNPL platforms may not be responsible for the total purchase amount even after you have decided to return the product. So, make sure you read and understand the terms and conditions stated.

Differences between Buy Now, Pay Later (BNPL) vs Credit Card vs Personal Loan

 BNPLCredit CardPersonal Loan
Interest Rate0% interestBetween 15% – 18% per annumBetween 8% – 11% per annum
ChargesNo annual feesInclude annual fees*Late payment charges*
EligibilityEasy approvalStrict approval requirements which depends on credit reportA bit more flexible as compared to credit cards, but still depends on the credit report
Facility15 – 20 minutes*3 – 4 weeks*1 day to 2 weeks*
AcceptancePurchase through the same platform only (only applicable to certain platforms)WorldwideA type of unsecured loan. You can apply and have the freedom to use the fund for any purpose.
*this is an estimation and varies according to the respective bank

1. Interest

Even though BNPL and credit cards offer installment plans without any interest rate, but the tenure is slightly different. Most credit card companies offer a slightly longer period which is up to 45 days whereas BNPL typically offers 15 to 30 days.

Most personal loan in Malaysia offers fixed rate whereby rate is fixed and does not change. Then, check the interest rate. This determines how much your monthly repayment would be.

2. Charges

Annual Charges: Most credit card comes with additional charges, like joining fees and annual fees, which could be higher for premium cards.

On the contrary, there are no joining fees or annual feels for BNPL service. So, you can register for free and make sure to set your credit limit so you can use it anytime when you need it.

For personal loan, late payment charges will be charged on borrowers who missed out on their monthly repayments after the due date. Again, this would depend on your respective banks. The fee that would be charged on the personal loan would usually be calculated as a percentage of the outstanding loan amount.

However, for Islamic personal loan there is no compounded interest for late payment. The borrower would be charged based on the remaining balance of the financing. This means that Islamic personal financing charges much lower late payment fees as compared to conventional personal loans.

3. Eligibility

Given the tight eligibility criteria of credit cards which includes income evidence, good credit score and credit history, and more. If you don’t fulfill the conditions of the criteria then your credit card might be rejected.

Instead, BNPL does not have a strict criteria. Its processes are much faster and easier if you use the BNPL service that is offer by fintech companies. As mentioned, you can register to use BNPL service for free and provide the necessary basic details together with your credit that is ready to be used.

As for personal loans, the eligibility requirements does not only look at your sector of employment but also your income level, existing commitments and repayment behaviour. If you meet the eligibility requirements and maintain a good credit record, regardless of whether you are a private or government employee, you have the same opportunity to get your loan approved. It is important that you know your credit payment record through credit reports such as CTOS and CCRIS. Read more on the difference between CTOS and CCRIS.

However, if you are a government servant you have the advantage to receive an alternative financing option like koperasi personal loan other than receiving financing from conventional banks or licensed moneylender personal loan

4. Facility 

The process of credit card application would take time because it requires several

The credit card application process is time consuming and tedious, as it involves several verification criteria. Credit cards usually take about 3-4 weeks to process an application. As compared to BNPL, the application is easy and fast. You can receive your approval in minutes.

For personal loans, it is important to provide complete and valid documentation to help facilitate the loan application process. So, make sure you have the necessary documents that can prove the stability of your income (such as salary slip, latest EPF statement or income tax declaration form) to submit to the financier for the application process.

5. Acceptance

BNPL is offered by Fintech companies limiting to businesses who have a relationship with them. So, this means that you cannot use this facility to make purchases outside their partner company.

Instead, credit cards are accepted worldwide. You can buy from almost any merchant, online or offline, via credit card.

Before applying for any personal loan, always investigate first the background of the agent who offers that loan service. You need to know that a legitimate lender will not charge any upfront fees before accepting a loan.

List of Buy Now, Pay Later Companies in Malaysia


1. Auto Service Financing

This is a collaboration between Direct Lending and SERV. This financing can help you split your expensive car service bill into 3 or 6 months. It is slightly different from other BNPL platforms, as this financing has a profit rate of between 0.8% – 1.5% per month, depending on the credit profile of the borrower. The best part is that this financing does not require a credit or debit card. You will receive the eligible amount of financing and application approval within 15 minutes* after completing the application.

Only 3 simple steps to apply:

1. APPLY: Fill up your personal information and receive fast pre-approval results.

2. UPLOAD: IC and bank statement

3. CHECK OUT: Sign financing contract, make first payment and set up repayment.

Service car now, pay later.

Financing options from 3 or 6 months up to RM5000.

2. Atome 

Atome automatically divides all bills into three equal payments, the first will be made during the time of purchase. The following two payments will spread 30 days apart, with no hidden fees or interest.

Users can also track and manage their monthly expenses or shop directly through Atome. It is available for download through App Store and Google Play.

3. myIOU 

Consumers can split their purchase into two, three or six payments with zero interest. Malaysians aged 18 and above who have access to a debit card can register an account and receive instant credit approval of RM1,000 for purchases at approved retailers.

It is available for download through App Store and Google Play.

4. Hoolah

It allow users to split the bill into three equal installments over three months with zero interest and no additional fees. To use this service, simply select Hoolah as your payment method during payment and fill out the quick application form (for first time users) with your debit or credit card details and you will receive a reminder automatically three days before your next payment deadline.

You can also shop and make payments through Hoolah apps, available for download on App Store and Google Play.

5. PayLater by Grab

It is available for all Grab rides, GrabFood/Mart orders, and online purchases made using GrabPay. There are two ways to use PayLater. One option is to split a large bill into four payments.

Alternatively, users can consolidate all of their bills and pay them together in one payment the following month. Grab does not charge any interest or upfront fees, as long as you pay on time. Available on the App Store and Google Play.

6. PineLabs

It allows you to split your bill when checking out items while shopping at the store. There is also a catalog on PoS devices to let you choose the plan of your choice, which works with both debit and credit cards.

Should You Use Buy Now, Pay Later (BNPL)?


buy now pay later malaysia
Credit: Freepik

No doubt, the BNPL service can help you to make big purchases without straining your financial budget for the month. Purchases with BNPL are ‘less painful’ because you are using credit and do not need make full payment upfront. If you pay in cash or in full, it feels ‘painful’ when you see the money disappear from your bank account, right? However, you must remember that a debt is a debt; it will never repay itself.

Moreover, if you store your credit information in online shopping accounts such as Shoppee, Lazada and others, it is easier for you to spend according to your wants and not needs. The easier the purchase process is, the more we are likely to spend. That’s why if you’re trying to control your spending, perhaps you can try adding  resistance and complicate the buying process.

For example:

  • Don’t save your card information online.
  • Only make purchases on your laptop.
  • Use cash only at stores.

Other useful tips is to practice delayed gratification. Let’s say you like an item. Add it to your cart first and wait for 3-5 days. If you still need it after the waiting period, then you can consider buying it.

Service car now, pay later.

Financing options from 3 or 6 months up to RM5000.


So, if you are someone who can pay off debts on time, use the BNPL service for emergency purposes; such as repairing your car at a workshop, and if you fail to get a personal loan for an important purchase due to a poor credit score, you can try using Buy Now, Pay Later.

However, if you have a good credit score it is not wrong to apply for other financing alternatives such as, Shariah compliant personal loans that do not charge any upfront fees and do not require a loan guarantor. The profit rate is also usually lower than a conventional personal loan.

This article is written for Direct Lending – a platform offering bank and koperasi personal loan and licensed moneylender personal loan. Direct Lending can help you to find, compare and apply for the financing that best suit your financial needs. Check your eligibility for free and get rates as affordable as 2.69% or as fast as 2 working days.

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