To protect consumer interests and eliminate concerns of over-indebtedness, the Singapore Fintech Association has formed a working group to build a buy now, pay later (BNPL) framework, which would include enforcement mechanisms.
In Singapore, where demand for buy now, pay later (BNPL) services is increasing, new guidelines are being drafted to protect consumers' interests. As more shops provide such payment methods via their online platforms, these guidelines aim to reduce the risk of over-indebtedness.
The rules, which are expected to be available in the second half of 2022, aim to ensure that BNPL has a positive impact on Singapore consumers, according to the Singapore Fintech Association (SFA), which also announced the formation of a working group to build the BNPL framework.
According to SFA, members of the BNPL working group include Grab, Atome, and Hoolah, and will work under the supervision of Singapore's industry regulator, the Monetary Authority of Singapore (MAS).
The committee would create a set of documents that would serve as behavioral guidelines and enforcement mechanisms for businesses that supply BNPL services.
According to the SFA, this framework would hold members to the highest ethical and professional standards in behavior and practice.
The BNPL working group would draft principles aimed at upholding justice, transparency, and inclusivity in particular. The SFA stated that decision-making procedures should be transparent, and the outcomes should benefit all consumers, particularly those in vulnerable situations.
"BNPL schemes offered in Singapore today include some safeguards to mitigate the risk of excessive debt accumulation by consumers," said Loo Siew Yee, MAS' assistant managing director for policy, payments, and financial crime. "The BNPL framework will be an important step forward in formalizing standards for the industry to ensure consumers' interests continue to be protected," he added.
The committee would also work to promote a fair and ethical environment to protect consumer interests and increase user trust in BNPL services and providers.