Buy Now, Pay Later in Malaysia: Consumer Debt, Digital Credit and the Consumer Credit Act 2025

Buy now, pay later (BNPL) has expanded rapidly in Malaysia, from 2.6 million users in 2023 to 7.5 million active accounts by the end of 2025 (the two series are not strictly comparable), yet until 2026 it operated largely outside any dedicated credit-conduct regime. This article offers an integrated financial and legal analysis of that expansion and of the regulatory response: the Consumer Credit Act 2025 (Act 873), and evaluates whether it resolves the consumer-debt risks and regulatory fragmentation that characterised the earlier framework. Buy Now, Pay Later (BNPL) has moved from a niche checkout option to a mainstream form of consumer credit in Malaysia. It grew quickly on e-commerce platforms, super-apps and e-wallets, and for years it did so largely outside the supervisory perimeter that applies to banks. This article examines the legal nature of BNPL and the adequacy of Malaysia’s evolving regulation: how it was regulated before 2026, and how the Consumer Credit Act 2025 changes the position. The study adopts a critical doctrinal methodology, evaluating the pre-2026 framework and the Act against criteria derived from the consumer-debt literature. Unlike earlier studies that treat consumer debt, regulatory fragmentation and the new statute separately, it analyses them together. The paper argues that while the Act closes historical gaps in the legal treatment of BNPL, insufficient safeguards may still expose consumers to unsustainable debt accumulation and financial instability. It then identifies the gaps that remain and offers recommendations for regulators, providers, consumers and policymakers.