In case you’re not too familiar with how buy now, pay later (BNPL) services work, they essentially function like credit cards. BNPL allows you to make purchases by splitting the cost into monthly instalments with 0% interest if you pay within the pre-determined tenure.
To illustrate, when you make a BNPL transaction, the BNPL provider will first purchase the item from the merchant (while taking a service fee). As a consumer, you will then pay the BNPL provider in instalments.
Similar to credit cards, you will be charged late payment fees if you don’t pay up in time, and these charges differ depending on the platform.
Typically though, applications for BNPL services tend to be more forgiving. Most would only require a picture of your IC and regular sign up details like name, email, phone number, home address, and more.
This is in contrast to the lengthy credit card assessment periods where applicants are required to submit documentation like pay slips, bank statements, employment info, etc.
Based on personal experience, credit cards also have a minimum salary amount to qualify for them. Thus, making it difficult for say, part-time workers or those who lack a good loan repayment reputation in general to apply. This is what makes BNPL attractive to many.
We’ve compiled a non-exhaustive list of BNPL services in Malaysia as of 2022 and noted down their credit limits, payment tenures, late fees, and partnered merchants.
1. Atome
Atome (pronounced a-toe-me) is a Singaporean BNPL service launched in 2019.
One of SEA’s largest BNPL platforms today, it is present in Singapore, Malaysia, Indonesia, Hong Kong, and Mainland China. It has partnered with over 2,000 retailers online and in-store.
To use its BNPL service, customers must be at least aged 18 and spend a minimum of RM10 for a single purchase. Instalments are spread out across three months.
Credit limit: RM1,500 for non-credit card users, RM5,000 for credit card users.
Payment tenure: Three months.
Late payment fees: RM30 per late payment (penalties are capped at RM60 per purchase).
Partner merchants: Over 2,000 retailers online and in-store including Zalora, Agoda, Machines, Starbucks, Coach, Sephora, and Fly Project.
2. FavePay Later
On top of its lifestyle app and e-wallet, Fave also has a BNPL service that was launched in mid-2021 for users to split their payments on FavePay transactions. Customers may also earn up to 10% cashback with every FavePay Later purchase.
FavePay Later is available at all Fave merchants in Singapore and Malaysia, which amounts to over 40,000 retailers. The credit limit provided is based on user assessments, and instalments are spread out across three months.
Credit limit: Based on user assessments.
Payment tenure: Three months.
Late payment fees: 1.5% of the outstanding payable amount per late payment after 7 days.
Partner merchants: Over 40,000 retailers including GNC, Marks & Spencer, Puma, and Pandora.
3. hoolah
hoolah is a Singapore-based BNPL service that we’ve previously written about. Launched in 2018, it expanded to Malaysia the following year and it’s now also operational in Hong Kong.
Similar to Atome, hoolah states that it works with a large variety of well-known merchants. As of November 2021, hoolah had over 2,000 merchants on board.
Like Fave, hoolah also determines the credit limit given based on user assessments and provides a repayment tenure of three months. Penalty fees are set at fixed prices and is dependent on your order amount.
Credit limit: Based on user assessments.
Payment tenure: Three months.
Late payment fees: It is dependent on your order amount.
- For purchases of RM0 to RM99.99, the penalty is RM7.50;
- For purchases of RM100 to RM499.99, the penalty is RM25;
- For purchases of RM500 and above, the penalty is RM75.
Partner merchants: Over 2,000 merchants including dUCK, Nike, Focus Point, Zalora, Zenyum, and JD Sports.
4. Mr Pay Later
Mr Pay Later is a Malaysian BNPL platform that allows users to split their payments over two or three months. A six-month instalment plan is also available, albeit only for selected merchants.
Merchants partnered with Mr Pay Later appear to be limited (about 20 of them) and lesser-known, including names like Net Cruise, Lapasar, and Kimchi Mart Malaysia.
Credit limits are based on user assessments when you sign up on their website, as it appears that the platform doesn’t have an app.
Information on late payment fees is unclear, with Mr Pay Later’s site only stating that it will charge users a small penalty if they’re late by more than 7 days past the due date.
Credit limit: Based on user assessments.
Payment tenure: Two, three, or six months.
Late payment fees: Unclear, but a small penalty will be charged if users are 7 days past the payment due date.
Partner merchants: About 20 merchants including Net Cruise, Lapasar, and Kimchi Mart Malaysia.
5. myIOU
Launched by IOUpay, a public listed Malaysian fintech company on the Australia Stock Exchange (ASX), myIOU has Yuna on board as its brand ambassador.
It offers tenures of two, three, or six months, which is more flexible compared to other platforms on this list. In an update provided by IOUpay, the team shared that they have 744 merchant relationships operating 1,649 outlets as of February 15, 2022.
Malaysians aged 18 years and above with access to a local debit or credit card can register for an account.
Credit limit: An initial limit of RM1,000 which can be increased to RM10,000 by applying for myIOU Credit+, with terms and conditions.
Payment tenure: Two, three, or six months.
Late payment fees: RM5 or 1% of the outstanding amount per late payment (whichever is higher).
Partner merchants: 744 merchants including Senheng, SenQ, Gintell, Hewlett Packard, Box of Bricks (Lego), Lazo Diamond, Wah Lee, and more.
Editor’s Update 3/3/22: Information in this section for IOUpay has been amended for relevance and accuracy based on updates given by the team.
6. PayLater by Grab
PayLater by Grab was launched in 2019 with a slightly different take on your conventional BNPL functions.
Users can either pay in four monthly instalments (PayLater), or pay the entire amount at the end of the next month (PayLater Postpaid).
PayLater can be used to pay for food, e-hailing rides, and groceries, and you can also purchase items from Grab’s partnering merchants such as Lilit, Zalora, All IT Hypermarket, and more.
PayLater Postpaid can only be used for Grab services, such as Grab rides, GrabFood orders and GrabExpress deliveries. GrabRewards points can also be earned when using this option.
While the full number of merchants available on Grab is inconclusive, the super app reportedly onboarded 600,000 new merchants across SEA during the peak of the pandemic in 2020.
In order to use Grab’s PayLater option, users would need to be at least:
- 21 years old and older;
- A Silver-tier member (accumulate at least 200 GrabReward Points);
- Have made three transactions on the app in the recent month.
Credit limit: Based on user assessments.
Payment tenure: Four months, or as one lump sum payment the following month.
Late payment fees: PayLater accounts will be frozen for each missed payment for users opting for instalment plans. The reactivation fee is RM10.
Partner merchants: Lilit, Zalora, All IT Hypermarket, along with Grab’s other in-app services.
7. PAYLATER
Not to be confused with Grab’s BNPL feature, PAYLATER is a Malaysian BNPL service launched in late 2020. It supports several well-known tech brands, such as Oppo and DJI.
The default tenure to settle your instalments is four months, and users can request for extended tenures such as:
- Up to 6 monthly instalments for purchases of RM999.99 and below;
- Up to 12 monthly instalments for purchases of RM1,000.00 and above.
Credit limit: Based on user assessments.
Payment tenure: Four, six, or 12 months.
Late payment fees: RM10 for every 7 days of late payment.
Partner merchants: Oppo, Gamer’s Hideout, DirectD, and Metrojaya.
8. Rely
Rely is a Singaporean-based BNPL service that has a shorter instalment plan than the rest of the options on this list.
Instead of monthly instalment plans, Rely offers 4 interest-free payments that are due every two weeks. It has about 60 partnered merchants in Malaysia including HERMO, Urban Biker, Baby Dots, and JD Sports.
While credit limits are subject to user assessment, those using a debit card have a transaction limit of RM1,000, while it’s RM4,000 for credit cards.
Rely’s late payment fee is unclear. Upon reaching out to a representative, they shared that the penalty fee will range between RM1-RM40 if payments are not made past the due date.
Credit limit: Based on user assessments.
Payment tenure: Two months (paid per fortnight).
Late payment fees: RM1-RM40.
Partner merchants: Over 60 partnered merchants including HERMO, Urban Biker, Baby Dots, and JD Sports.
9. SPayLater by Shopee
Launched at the start of 2021, SPayLater is Shopee’s foray into the BNPL scene. Although, it is only available to select Shopee users and it is unclear what criteria are used for eligibility.
SPayLater can be used on purchases with a minimum value of RM15 across its 11,000 sellers around its 7 markets.
The BNPL service offers two repayment methods. You can either pay the entire amount at the end of the month (interest-free), or pay instalments across two, three or six months.
Those opting for the instalment plan will need to pay a 1.25% processing fee on their order amount each month.
For late payments, SPayLater charges a penalty fee of 1.5% per month of the overdue amount.
Credit limit: Based on user assessments, can go up to RM6,000.
Payment tenure: One lump sum at the end of the month or instalments across two, three or six months.
Late payment fees: 1.5% per month of the overdue amount.
Partner merchants: All Shopee services including merchants on its e-commerce marketplace.
10. Split
Malaysia’s first Shariah-compliant BNPL platform, Split, is the only BNPL service that doesn’t charge any late payment fees after its three-month instalment plan.
If customers are unable to pay back in time, Split will hear out a customer’s reasoning and work out a more suitable payment plan for them, once their claims are verified.
Split has about 1,000 merchants onboard, including popular tech brands like Samsung, Machines, Switch, and Dyson.
Credit limit: Based on user assessments.
Payment tenure: Three months.
Late payment fees: None.
Partner merchants: Samsung, Machines, Switch, Sony, Dyson, and more.
-//-
Here’s a summary table of the BNPL players in Malaysia as of 2022:
| Name | Credit limit | Payment tenure | Late payment fees | Partner merchants |
|---|---|---|---|---|
| Atome | RM1.5K (non-credit card users), RM5K (credit card users) | 3 months | RM30/late payment | Over 2K online and in-store |
| FayePay Later | Based on user assessments | 3 months | After 7 days, 1.5% of outstanding late payment amount | Over 40K |
| hoolah | Based on user assessments | 3 months | Dependent on order amount, can go from RM7.50 – RM75 | Over 2K |
| myIOU | RM1K, can be increased to RM10K | 2, 3, or 6 months | RM5 or 1% of outstanding late payment amount (whichever is higher) | 300+ |
| Mr Pay Later | Based on user assessments | 2, 3, or 6 months | Unknown | About 20 stores |
| PayLater by Grab | Based on user assessments | 4 months, or a lump sum payment the next month | Accounts with missed payments will be frozen, which require an RM10 reactivation fee | Potentially 600K |
| PAYLATER | Based on user assessments | 4, 6, or 12 months | RM10 for every 7 days of late payment | Popular tech brands |
| Rely | Based on user assessments | 2 months (paid per fortnight) | RM1-RM40 | Over 60 |
| SPayLater by Shopee | Based on user assessments, can go up to RM6K | 2, 3, or 6 months, or a lump sum at the end of the same month | 1.5%/month of the overdue amount | All Shopee services and its e-commerce merchants |
| Split | Based on user assessments | 3 months | None | Popular tech brands |
It seems that the BNPL players that already have an existing ecosystem of merchants within their apps may have a slight advantage over standalone BNPL platforms.
These super apps already have an internal marketplace for food, shopping, and more, thus making it easier for people to use their BNPL options when checking out if they already have an existing account.
Thus, if BNPL-only companies without the advantage of an in-built ecosystem want to compete for consumer use, they’ll need to onboard a significant number of merchants.
- Read other BNPL articles we’ve written here.
Featured Image Credit: atome / hoolah
