Latest news with #BNPL
New Straits Times
18 hours ago
- Business
- New Straits Times
Buy Now, Pay Later should not be the default way to survive
LETTERS: The first time using Buy Now, Pay Later (BNPL) felt harmless. Three easy payments for a pair of shoes. No interest, no hassle, no guilt. But that mindset is exactly what gets so many young people into trouble. From 2020 to 2025, more than 5,189 Malaysians under the age of 34 were declared bankrupt. Most of them were between 25 and 34, an age group that should be building their financial future. This is not just a statistic. It reflects a growing reality for many young adults trying to manage life's expenses with limited income and increasing pressure to spend. With BNPL so widely available and heavily promoted, it's no surprise that more people are relying on it. The recent Consumer Credit Bill passed in Parliament shows how urgent the problem has become. The new law introduces the Consumer Credit Commission to oversee BNPL and other non-bank credit providers. It's a step in the right direction, but the fact that it's needed at all speaks volumes. BNPL is appealing because it feels light — no upfront payments, interest-free instalments, and fast approval. But the catch comes later, quietly. Miss one instalment and there's a penalty. Miss a few, and the debt grows without warning. Penalties between RM10 and RM50 might not sound like much, until they keep stacking up. What began with one small item turns into four or five ongoing commitments. BNPL encourages impulse decisions. The thought process is no longer "can I afford this," but "can I split this". Bank Negara Malaysia reports that most users earn below RM3,000 a month. For many, even one missed payment affects rent, food or transport. BNPL has helped some low-income families afford essentials like baby formula and groceries, especially during difficult times. That's understandable. But it shouldn't become the default way to survive. In the first half of 2025 alone, Malaysians spent RM9.3 billion through BNPL. Some RM121 million of that is overdue. The numbers aren't slowing down. What's worrying is how normalised it has become. Not just for emergencies or needs, but for clothes, gadgets and online shopping sprees. These habits can lead to ongoing debt that feels manageable at first but becomes overwhelming over time. Regulation helps. But awareness matters more. Many still don't fully understand the risks they're taking. Educational institutions should do more to teach students about managing their money. Financial literacy is a skill that needs to be taught and cultivated early, not learned after it has become a problem. BNPL is not the enemy. But without control, it turns into a cycle that's hard to break.
Yahoo
a day ago
- Business
- Yahoo
Your credit score could go through a big change this fall — but that's good news if you're part of this growing group
If you've shopped online in the last few years, you've likely seen the option to pay with Klarna, Affirm, Afterpay or similar services. These 'buy now, pay later' (BNPL) apps let you split your purchase into four equal and interest-free installments or spread the cost over longer periods with interest. If you've ever used these services, you'll want to know those payments are getting reported to FICO — meaning they can show up on your credit report. Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) You don't have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here's how According to the Federal Reserve Economic Well-Being of U.S. Households in 2024 report, 15% of Americans have selected the BNPL option within the last year. The payments seem simple enough: An $80 item can cost you $20 every month for four months, and if you pay on time, you won't get charged a penalty or interest. Plus, these types of payments are usually smaller, since they are used on routine online shopping. But, nearly a quarter of shoppers using BNPL have reported a late payment, the Federal Reserve found. Now, the late charge can show up on a buyer's credit score. Why FICO is making the change FICO, which did a yearlong study with BNPL provider Affirm, wants to see how American consumers spend their money and how often they need to take out these small 'loans.' The BNPL option "is becoming a really big part of how people are managing their finances, and so FICO wanted to be able to manage and reflect that shift," Julie May, vice president and general manager of business-to-business scores at FICO, told NPR. The Federal Reserve says BNPL is used by many demographics but especially by younger low and middle-income Americans. And for those shoppers, using Klarna or Affirm may be the only way to afford even those smaller purchases. FICO says this data has been a 'blind spot,' and now with BNPL data, they can see how many loans Americans can truly afford to take on. "We want people to get the credit that they need — but we don't want lenders to be flooding the market with credit beyond what's safe and reasonable for consumers," Adam Rust, director of financial services at the Consumer Federation of America, told NPR. Making BNPL purchases can be a way to start building credit if you have no loan history, but FICO says using BNPL won't do much to increase your current score if you're trying to bump it up. Plus, missing payments will still hurt your score. The potential ding to your credit score isn't the only risk with this payment option, either. Rust warns that they don't have nearly the same protections or regulations as credit cards: If you need to refund an order or find out an item was purchased fraudulently, you may still be expected to pay those third-party platforms. While the Consumer Financial Protection Bureau ruled that BNPL customers have the right to dispute fraudulent charges in 2024, they've since announced that they are pulling back from enforcing that ruling. Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says — and that 'anyone' can do it Should I use buy now, pay later? BNPL can indeed be an easy and convenient way to pay for everyday items, but at the end of the day, you are still taking out a loan that can now impact your credit. Let's look at what to consider before selecting that option at checkout. First, ask yourself if you can afford to buy the item outright without installment payments, especially if the item is not a necessity. If not, it may be a red flag that you can't actually afford to make that purchase. If the item is a want but not a need, consider saving up a bit longer so you can buy it outright — without fear of a late payment. Consider any other debts you may have, like existing credit card balances or other loans. Even though a BNPL loan is often small, forgetting your installment due date could cost you big time: a late fee could be as much as 25% of the item's original price, and for those longer-term installments with interest, you could be charged even more. Be sure to check the installment schedule. Some platforms withdraw monthly, while others are bi-weekly. Using BNPL can be a smart option for a necessary, larger one-time purchase, especially if you know you're consistent at making payments on time and it won't become a habit. Additionally, it can serve as a small step towards establishing a credit history — provided you maintain a good payment history — if you have never previously taken out a loan or credit card. What to read next Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Accredited investors can now buy into this $22 trillion asset class once reserved for elites – and become the landlord of Walmart, Whole Foods or Kroger without lifting a finger. Here's how Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
The Star
2 days ago
- Business
- The Star
Paydibs named direct FPX acquirer by PayNet
KUALA LUMPUR: Paydibs, a homegrown digital payments provider, has been officially onboarded as a direct third-party acquirer for the financial process exchange (FPX) by Payments Network Malaysia Sdn Bhd (PayNet), making it one of only 10 non-bank acquirers directly connected to PayNet's FPX infrastructure. In a statement, Paydibs said the direct access enables it to process FPX transactions independently, eliminating the need for intermediaries and allowing merchants nationwide to benefit from faster settlements, improved cost efficiency and greater control. Paydibs chief commercial officer, Tee Kean Kang, said the direct connection reinforces the company's position as a merchant-first solutions provider, delivering a seamless and transparent payment experience that supports Malaysia's rapidly evolving digital economy. "At the heart of this milestone is our commitment to building a more inclusive and resilient payments ecosystem. Being directly connected to PayNet allows us to offer merchants greater control, faster access to funds and enhanced features," he said. The company stated that the development complements its ongoing strategic initiatives, including the launch of Paydibs NEO-Malaysia's first all-in-one payment terminal, which integrates QR, card, buy now pay later (BNPL), and soundbox payment features into a single device for seamless in-store transactions. Paydibs added that its role as a Digital Partner under the BSN MSME Digital Grant MADANI allows eligible businesses to adopt digital payment solutions at subsidised rates, in support of the government's push for wider digital adoption and financial inclusion. Looking ahead, the company plans to introduce embedded financing options and enhance integration with national payment infrastructure to support business continuity, operational efficiency, and long-term growth. For more information, visit - Bernama
The Sun
2 days ago
- Business
- The Sun
Consumer Credit Act will foster trust, transparency and more responsible credit usage: Atome
KUALA LUMPUR: The incoming Consumer Credit Act will foster trust, transparency and more responsible credit usage, said Atome Malaysia's head of BNPL (buy now, pay later), Danny Lim. The legislation will also help enhance confidence in BNPL services and the industry, he added. 'In terms of what we focus on, in the short term, we want to make sure that we are supporting the regulators as they finalise the Bill. That's our commitment, working with the regulators, seeking their advice, and also doing what's required,' he told SunBiz. Lim said Atome fully supports the introduction of the Act as many still don't have access to bank credit. There are still underserved segments without access to regulated financial services, and we're bridging that gap by supporting their short-term financing needs.' Lim stressed that Atome aims to improve financial literacy and ensure users understand how to use BNPL as a budgeting tool and not for overspending. He pointed to a survey by the Consumer Credit Oversight Board, which found that 73% of BNPL users earn less than RM5,000 per month and of which 69% say that this is their only source of financing as they don't have access to or are not served by any bank. However, Lim acknowledged that public perception of BNPL is negative, largely due to regulatory gaps and lack of awareness. 'And, of this, I think it's important to ensure that we give public confidence, so these regulators' view coming up to us is a good positive move, so that users are more confident in using this. That's how we see it.' Atome compliance lead Inderjit Singh said its internal frameworks are modelled on regulatory standards from other countries where BNPL is already supervised, such as Singapore and the Philippines. 'We've got no regulation here (Malaysia) now. Internally, whatever we develop, our risk management frameworks, our business strategies, compliance framework, is based on what we've done in other markets.' Inderjit said when Malaysia's Consumer Credit Act comes into force, only minor adjustments will be needed. 'We already have something in place that should be sufficient from a regulatory perspective. Operationally, regulation won't impact us too much.' According to news reports, Deputy Finance Minister Lim Hui Ying said BNPL transaction volumes rose from RM83.8 million in the second half of 2024 to RM102.6 million in the first half of this year. During the second reading of the Consumer Credit Bill 2025 in the Dewan Rakyat on July 21, Hui Ying said the surge in BNPL activity poses risks to consumers, especially low-income groups and those with poor financial literacy, who are vulnerable to unmanageable debt. The total value of BNPL transactions increased 31%, from RM7.1 billion in second-half 2024 (H2'24) to RM9.3 billion in H1'25. The number of active BNPL accounts rose from 5.1 million at the end of last year to 6.5 million as of end-June. To address this and protect the interests of credit consumers, the government will establish a statutory body known as the Consumer Credit Commission (CCC) under the Consumer Credit Act. The commission, under the Ministry of Finance, will regulate currently unregulated sectors through a licensing and registration framework. Hui Ying said the Bill is part of the government's broader effort to introduce comprehensive consumer credit legislation and restructure Malaysia's credit landscape. It is designed to address two major challenges – the presence of unregulated industry players and the fragmented oversight of the credit sector by multiple authorities. 'The Bill's core aim is to protect consumer interests by ensuring proper conduct and responsible lending by all credit-related businesses, while promoting a fair, efficient, and transparent credit ecosystem,' she said. The Bill outlines the CCC's responsibilities, including advising the government on national consumer credit policy, promoting fair and responsible market practices and granting licences based on a 'fit and proper' evaluation. 'With this Bill, the government affirms its commitment to creating a safer credit ecosystem for the rakyat,' said Hui Ying. The deputy finance minister tabled the Bill for its first reading in the Dewan Rakyat on March 4. It was passed during the second reading through a majority voice vote on July 21. The Consumer Credit Bill 2025 paves the way for regulating non-bank credit and credit service providers amid rising concerns over BNPL scheme proliferation. Under the Bill, six types of businesses will come under the commission's oversight. Three will require licences from the CCC to operate – BNPL providers, leasing companies and factoring services providers (including syariah-compliant offerings). In financial terms, factoring involves a business selling its unpaid invoices to a third party, or 'factor', at a discount to raise working capital. The other three – debt collection, acquisition of non-performing loans or financing, and debt counselling or management services – must register with the CCC. In total, 253 businesses across these six categories will be regulated. Additionally, under the new law, the Ministry of Housing and Local Government will be responsible for licensing syariah-compliant pawnbroking (Ar-Rahnu) and syariah-compliant credit facilities.
Yahoo
2 days ago
- Business
- Yahoo
Will Klarna SPAC or IPO in 2025?
Key Points Klarna, which offers buy now, pay later plans, has seen impressive growth in its revenue and customer base. It paused plans to go public in April after the Trump administration announced sweeping import tariffs. An IPO could still happen this year, but Klarna stock will likely be volatile, especially in the early going. These 10 stocks could mint the next wave of millionaires › Investors have been eagerly waiting Klarna's public listing. The Swedish fintech company, most famous for offering buy now, pay later (BNPL) services, has about 100 million active consumers across 26 countries. Klarna was close to becoming a publicly traded company earlier this year until the Trump administration announced import tariffs on "Liberation Day." If you're wondering whether you'll be able to invest in Klarna in 2025, here's what's known. Klarna's IPO is on hold Klarna filed its prospectus for an initial public offering (IPO) in March of this year and planned to go public in April. Those plans changed at the last minute after President Trump announced sweeping import tariffs. Due to the economic uncertainty and the stock market sell-off, Klarna paused its IPO. Klarna hasn't announced a new IPO date yet and is reportedly planning to wait until after the summer, according to a report from Dagens Industri, a Swedish financial newspaper. However, management hasn't confirmed that timeline. The way Klarna will go public is confirmed; it will hold a traditional IPO. It won't use a special purpose acquisition company (SPAC), a shell company that goes public and then seeks out a merger with a private company. While SPAC IPOs have been growing in popularity, Klarna ruled out that option years ago. Will Klarna be a good investment opportunity? Klarna has been successful as a BNPL company -- it's the fourth largest in terms of U.S. users, according to Statista -- but it faces concerns about its business model and financial losses. BNPL companies are heavily reliant on the economy and interest rates. When the economy is strong, consumers are more willing to finance discretionary purchases through services like Klarna. During downturns, people tighten up their spending. Interest rates also impact BNPL companies by increasing their funding costs, especially since these companies normally offer interest-free plans. Klarna's revenue has been steadily growing, jumping 24% to $2.8 billion in 2024. Net profit was $21 million, a 109% improvement from 2023, when the company posted a net loss of $244 million. However, it was only profitable because of a net gain of $171 million related to its sale of Klarna Checkout. Klarna was back to losing money in 2025's first quarter, with a net loss of $99 million, a 110% year-over-year increase. That said, you could make a compelling bull case for Klarna. Its customer base is growing rapidly (18% year over year as of Q1 2025), and so is the number of merchants who accept Klarna (up 27% year over year). Klarna is also expanding its offerings. Last month, Klarna and Visa (NYSE: V) launched a debit card that lets cardholders pay in full upfront or use pay later options, and Klarna announced it's launching wireless service plans, like fellow fintech companies Revolut and Nubank have done. Another area in which Klarna has shown promise is the incorporation of artificial intelligence (AI) technology. It started a collaboration with OpenAI in 2023 to incorporate Klarna shopping results into ChatGPT answers. Klarna has also leveraged AI to cut costs. It estimates that AI is responsible for about $10 million per year in savings on sales and marketing spending. Klarna will likely go public in the near future Investors probably won't need to wait too much longer for Klarna to be available on the stock market. Polymarket, a prediction platform, currently has the odds of a 2025 Klarna IPO at 75%. There have also been several successful IPOs since the stock market turmoil in April, including Circle (NYSE: CRCL) and Chime (NASDAQ: CHYM), which could convince Klarna's management to take the plunge. Stocks can be volatile in the early days, so even when Klarna goes public, you may want to exercise patience before buying any shares. For a potential point of comparison, investors can look at Affirm (NASDAQ: AFRM), a BNPL company that completed its IPO in 2021. In its first year on the market, it went through several wild price swings. It's currently (as of July 23) 61% off the all-time high it reached in November 2021. IPO stocks can be good long-term investments, but the hype surrounding them sometimes leads to overvaluations. If you're thinking about investing in Klarna, estimate a fair price for it before the IPO and use that to decide whether to buy early or wait for the initial hysteria to wear off. Trump's Tariffs Could Create $1.5 Trillion AI Gold Rush The Motley Fool's analysts are tracking a massive shift in U.S. tech. Over $1.5 trillion is already flowing into infrastructure, AI, and advanced manufacturing… and the number keeps climbing. Following a major tariff policy shift, a new AI Gold Rush is taking shape, and we think . It builds the tech infrastructure that Apple, OpenAI, and others suddenly can't live without. We just released a full write-up on this under-the-radar stock — and why now might be the exact moment to move. Continue » *Stock Advisor returns as of July 21, 2025 Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Visa. The Motley Fool has a disclosure policy. Will Klarna SPAC or IPO in 2025? was originally published by The Motley Fool
