Should you buy now and pay later?

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If you’ve shopped online recently, you may have noticed new payment options at checkout, including buy-now-pay-later (BNPL) credit, for purchases like clothing, electronics, furniture, and exercise equipment. BNPL is a type of deferred payment option that generally allows you to purchase items with little to no money paid up front, followed by installment payments. Its use has spiked during the COVID-19 pandemic. Although features of BNPL sound similar to traditional credit cards instalment plan, there are distinct differences. It’s essential to understand the benefits and risks that come with BNPL (or any financial product) before making your next purchase.

How BNPL works

Products that are eligible for BNPL range in price from less than RM100 to a few thousand ringgits. When you’re buying one of these products using BNPL, you will select that option at checkout online or in an app. If approved, the purchase is sent to you and the cost is split into a payment schedule – typically monthly until the balance is paid in full. Approval takes minutes, with no interest or finance charges.

Unlike credit card companies or other consumer loan lenders, BNPL companies generally don’t conduct a hard credit inquiry when you apply. Instead, most BNPL providers only require the following:

  • You’re at least 18 years old
  • You have a mobile phone number
  • You have a debit or credit card to make payments
  • They are able to validate your identity.

BNPL may seem straightforward and convenient; however, you should consider a few things before selecting this option to make a purchase.

Shopping BNPL

Don’t overextend your finances

BNPL can be a tempting payment option for many consumers because it makes it easy to purchase something today and pay for it later. Because you can qualify for BNPL without passing a hard credit inquiry, make sure you have a good sense of your finances and whether the payments will fit within your budget. Just because you qualify for BNPL, or any other credit product, doesn’t mean you should use it. 

Understand credit reporting

Your repayment behavior on many types of loans and credit products is reported to consumer reporting companies, such as CTOS. If you make a late payment, and the BNPL company reports your late payment to a credit reporting company, this can harm your credit history.

BNPL products can carry late fees

While some BNPL companies don’t charge interest, but do charge late fees if you miss a payment. In addition, you could be blocked from future purchases until you make past payments and could even have your debt sent to a debt collector if you fail to repay. Because lenders have different fees and policies, it is important to carefully review the BNPL terms and conditions to understand your obligations. Also, be aware that your bank may charge you a late fees if you sign up for automatic repayment through your debit card or bank account and don’t have enough funds to cover the payment.

buy now pay later

BNPL products don’t have the same protections as other types credit

Like a credit card, you can use BNPL to make a purchase and pay for it later over time. However, BNPL loans currently lack the consumer protections that apply to credit cards. For example, BNPL companies don’t offer the same dispute protections as credit cards if the item you purchase is faulty or a scam. Returning merchandise bought with BNPL can sometimes be complicated. The BNPL company may hold you responsible for the total cost of a purchase even after you’ve returned the product, so be sure to read and understand the merchant’s specific return policies.

Compare BNPL to other payment options

BNPL offers aren’t the only new payment option you might find when making an online purchase. There are other types of installment loans that let you repay purchases over a longer time, though some of these loans charge interest and may also charge late fees. Most of the other loan options also do a hard credit inquiry when you apply and report your payments to the credit bureaus, which could help or hurt your credit score.

3 featured BNPL companies in Malaysia


  1. Atome – Atome is a Singapore-based platform that’s one of the largest BNPL players in Asia. It lets you shop at over 2,000+ retailers online and in-store. It supports popular brand names like Zalora and Agoda. It charges a relatively high penalty of RM30 per late payment, although the maximum late fees you can incur is RM60.
  2. Hoolah – Like Atome, Hoolah is a popular Singapore-based platform that supports a large variety of merchants. However, its late fees are quite high. If your order amount is RM500 and above, you could be charged RM75 each time you miss your payment, up to a maximum of RM150 per order.
  3. SPayLater by Shopee – SPayLater is Shopee’s entry into the BNPL marketplace. It offers two ways of repayment. You can pay the entire amount at the end of the month (no fees charged) or pay instalments across two, three or six months (and get charged 1.25% a month).

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