The Bank of Thailand (BOT) is set to tighten up controls in December on the “Buy Now, Pay Later” (BNPL) service and consumer credit purchases, in an attempt to address debt problems and create ‘financial immunity’ for the public in the long run.
The central bank made clear that the new measures are not intended to block innovation or a new form of financial service, but to keep the credit growth within the rules and standards by taking into account the risks involved.
By placing the BNPL under the regulatory system is, therefore, a way to screen risk, to prevent debt problems from the start, said the central bank.
It also said that it had discovered that BNPL services have grown rapidly, reflecting a change of behaviour and increased risks to consumers, especially the new generation and “fragile” groups who may incur debt to the extent that they cannot service it.
According to the central bank, a survey of seven major BNPL service providers revealed that the number of credit accounts has soared by 90% annually, while the amount of credit has increased by an average of 88% per annum. In 2024, the amount of credit provided was 22 billion baht on 4.23 million credit accounts and increased to 48 billion baht on 8.15 million credit accounts last year.
For the first half of this year, the amount of credit has risen to 57 billion baht on 11 million credit accounts.
BOT Governor Vitai Ratanakorn said that the BNPL service has increased significantly faster than personal credit and credit cards, with some consumers making use of the BNPL service to buy consumer products for daily use.
If not regulated properly, he said the convenience in spending may lead to the accumulation of debt in the long run.
The central bank has introduced five new measures to regulate BNPL services and has invited members of the public to express their opinions.
The five measures are:
· BNPL users must be over 20 years old
· Credit lines must not exceed 20,000 baht and repayment must be within six months
· The combined interest rate, fines and fees must not exceed 15% per annum
· The credit line cannot be exchanged for cash or digital money, withdrawn or transferred to other credit accounts
· Service providers must exercise fairness in asking for repayments and clearly show the amount owed and the amount of interest due
