KUCHING: The use of BNPL (Buy Now, Pay Later) schemes among young people carries both advantages and disadvantages.
Economic analyst Dr Abu Sofian Yaacob said BNPL became popular after movement control order (MCO) because a lot of businesses were affected and in order to push sales, they introduced this scheme.
“The effectiveness of this scheme depends on how one uses it. It’s quite good if you are buying essential appliances such as washing machines and refrigerators but not advisable to buy certain gadgets such as smartphones.
“Nowadays, young people tend to follow trends by purchasing expensive new gadgets, often spending a large portion of their salaries.
“This can ultimately lead to financial problems and even bankruptcy. They should focus on spending within their means,” he said.
He added that most young consumers often feel pressured to keep up with their peers, which can be a harmful habit.
“This tendency not only puts their financial stability at risk but also affects their families, leading to potential financial difficulties and family issues,” he said.
BNPL is a lending method that enables consumers to buy items immediately while spreading the payment over a series of monthly installments.
For online shoppers, BNPL offers convenience and reduced upfront costs. With just a few clicks and a soft credit check, consumers can break up the total due into a straightforward repayment plan.
According to Bank Negara Malaysia, the initial competition for market share seems to have stabilised, with three BNPL providers such as Shopee, Grab, and Atome which are now leading the market.
Together, they represent 97 per cent of total transactions and 96 per cent of the value in the first three quarters of 2023.
Although BNPL can make purchases more affordable, users should be cautious about overextending themselves financially.
Falling behind on payments can result in late fees, and disputes or scams often have fewer consumer protections compared to traditional loans.
