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Since online shopping has become commonplace, it is highly unlikely that shoppers have not encountered Buy Now Pay Later (BNPL). They act as financial facilities for consumers to break payments into instalments.
They aren’t new, having been in the game for several years, but one could say that the pandemic expedited the industry’s growth, as some folks were embracing the “live now, pay later” mentality to supplement their lifestyle and worry about the consequences later.
According to a survey conducted in Q4 2021, Research and Market states that BNPL payments in Malaysia are projected to grow by 109.5% annually to reach RM2.68 billion in 2022, indicating a bullish trend.
As BNPL services operate without much regulatory oversight, some would argue that the payment scheme is a big lure for individuals with poor or no credit history who cannot qualify for credit cards or loans, since it requires them to undergo a more rigorous process.
Others may view BNPL services as financial tools to help them get to where they want to be, given that paying a lump sum on a large purchase would not be optimal for cash flow.
Regardless of one’s reasons for using BNPL, it’s clear that their purpose is in demand.
With various options to choose from, I decided to do a comparison review on my experiences making purchases through these specific BNPL services: hoolah, SPayLater, PayLater by Grab, and Atome.
For this comparison, we’ll be taking into account the common parameters such as the payment tenures, fees, merchant selections, credit limits, and personal experience.
hoolah
Launched in 2018 in Singapore, hoolah later expanded to Malaysia, giving consumers access to 2,000 merchants, including JD Sports, Bonia, and Zalora.
hoolah is one of my first experiences using a BNPL service; it was an attractive option when I had to wait for the six-month term of my fixed deposit to end. I did not want to interrupt my cash flow, so BNPL served as a bridge.
When the lockdown was initially implemented, I purchased a gaming chair from SSCUS for RM539. It appeared to accept hoolah as a payment option during checkout, and I had an RM1,600 credit limit to start with.
hoolah offers to split the payment into three instalments with zero percent interest and no hidden fees. This means that it doesn’t cost anything to use the service.
However, consumers are required to pay the initial instalment at the time of purchase, which can be inconvenient for those who wish to delay the payment.
Excluding the first of three payments, the available payment duration is only two months. My overall opinion:
| Criteria | Ratings |
| Repayment tenures | 2 – Not the most convenient |
| Fees | 5 – No interest or hidden fees |
| Merchant selection | 2 – Not as broad as others |
| Credit Limit | 3 – It could be higher |
| Personal experience | 3 – Reasonable to use, but there could be better options out there |
With the acquisition of hoolah by ShopBack last November though, its services will instead be known as ShopBack PayLater, a BNPL facility powered by hoolah on the ShopBack app.
SPayLater by Shopee
Shopee launched SPayLater in early 2021 for its users. As a Shopee user, I’ve found this to be quite useful thus far. The platform provided me with an initial credit limit of RM1,600, similar to hoolah’s, which I consider low.
After a few months and numerous online purchases, it was increased to RM3,000, which is half of its maximum credit limit (RM6,000).
Shopee will select eligible users rather than requiring registration for SPayLater. According to some sources I discovered on Twitter, the internal team will check to see if the user has any saved credit cards in their Shopee Wallet.
Logically, this would appear to be a sensible method for determining a person’s creditworthiness, as credit card users have demonstrated that banks view them as such. However, they may also consider additional factors when determining eligibility.
In the past year, I have bought several things such as a mattress, an ergonomic chair, and other minor necessities to consolidate my purchases.
Though I find the facility to be very useful, SPayLater has a few drawbacks when compared to other BNPL services on the market.
Instalments are available only to specific merchants within the Shopee platform. Products related to the precious metals category such as gold and silver are found to be excluded from this option.
Other than that, unlike its competitors, SPayLater charges a monthly processing fee of 1.5% of the total payment amount.
The maximum payment term was initially set at six months, but was eventually extended to twelve months for selected users. Using a monthly rate of 1.5%, the annualised rate would be 18%.
According to its FAQ page, users who miss payments will have their accounts temporarily frozen and will need to pay a fee of RM10 to have them unfrozen.
The due date for each statement is the 10th of each month, which is set to renew at the beginning of each month. This translates to a 10-day grace period for its users.
Grace Period: A grace period is the time between the end of a billing cycle and the due date. Users may not be charged interest during this period if they pay their balances in full by the due date. Typically, credit card issuers provide its users with a 20-day grace period.
| Criteria | Ratings |
| Repayment tenures | 5 – Up to 12 months |
| Fees | 1 – Not convenient, charged at 1.5% p/m |
| Merchant selection | 4 – A broad selection of merchants, but limited to categories |
| Credit Limit | 5 – High credit limit with active use |
| Personal experience | 4 – Useful for Shopee users |
PayLater by Grab
Grab announced its PayLater feature in 2019, offering its users a way to split payments up to four months. PayLater is available for food deliveries, e-hailing rides, groceries, and Grab’s participating merchants.
During the peak of the pandemic in Southeast Asia in 2020, the super app reportedly onboarded over 600,000 new merchants. Fashion brand dUCk, beauty and personal brand The Body Shop, and footwear brand Charles & Keith are among them.
In terms of the fees, users who make timely payments will not be charged any interest, including any other fees. The only fee that may be assessed is the administrative fee to reactivate a suspended account due to missed payments.
To be qualified for the facility, one must be over 21 years old, in the Silver tier or higher, and have made at least three grab transactions in the past three months using cash, credit, or debit card.
This means that Grab is most likely to approve based on a user’s transaction frequency on its app. Similar to Shopee, approvals undergo an internal review.
My credit limit was initially set at RM2,000 in October 2021, but it has since been increased to RM2,500 due to my on-time payment history.
However, the credit limit for Grab rides and food deliveries is capped at RM1,000, regardless of the total credit limit, which I personally find to be a limiting factor.
I used PayLater by Grab to purchase a bag from Storming Gravity and selected the four-month option. The first month’s instalment must be paid in advance.
The due date is determined by the date of purchase, and there is no grace period.
| Criteria | Ratings |
| Repayment tenures | 3 – Up to four months, with one month upfront |
| Fees | 5 – No interest or hidden fees |
| Merchant selection | 5 – Highest number of onboarded merchants |
| Credit Limit | 4 – Prompt increase based on payment history |
| Personal experience | 5 – Intuitive interface & reliable |
Atome
This Singapore-based financial institution is currently one of the largest BNPL platforms in Southeast Asia. The BNPL brand has partnered with over 5,000 retailers for both online and in-store purchases, according to its website.
People are likely to encounter Atome when purchasing goods over the counter in malls and well-established outlets.
The app’s sign-up process was straightforward, and I received an RM15-off voucher for new users, which was applicable to all shops.
When I went to Machines to purchase a new lightning cable for my iPhone, I noticed the Atome QR Code at the cash register and knew I had to claim the voucher.
The retailer walked me through the steps of enrolling in the payment plan, and I opted for a three-month term.
Similar to Grab and hoolah, the initial payment is required upfront at the point of purchase, which was RM24.68 given the checkout price of RM74 (after claiming RM15 off).
Like the vast majority of BNPL services, Atome does not charge interest on good paymasters. It also has an app that typically offers attractive discounts on select brands to attract users.
At one point, I was even tempted to redeem a 10% off voucher for a 31.5-inch curved 4K gaming monitor from Prism, which would have saved me approximately RM80. It was a decent bargain.
But I knew I could not afford it at the time, despite having the option to divide my payments into three instalments, so I resisted. (One day, maybe.)
| Criteria | Ratings |
| Repayment tenures | 2 – Not the most convenient, limited to three months with the first payment upfront |
| Fees | 5 – No interest or hidden fees |
| Merchant selection | 5 – Added value by including offline stores |
| Credit Limit | 2 – Not disclosed to users |
| Personal experience | 4 – Attractive promos to help users save more |
-//-
In the overall picture, here’s how they all fare:
| Criteria | hoolah | SPayLater | PL by Grab | Atome |
| Repayment tenures | 2/5 | 5/5 | 3/5 | 2/5 |
| Fees | 5/5 | 1/5 | 5/5 | 5/5 |
| Merchant selection | 2/5 | 4/5 | 5/5 | 5/5 |
| Credit Limit | 3/5 | 5/5 | 4/5 | 2/5 |
| Personal experience | 3/5 | 4/5 | 5/5 | 4/5 |
| Total | 15/25 | 19/25 | 22/25 | 18/25 |
PayLater by Grab emerged victorious in the end, with only a one-point gap separating SPayLater and Atome.
Thus, the ranking of these services, from first to last, is:
- PayLater by Grab
- SPayLater
- Atome
- hoolah (now ShopBack PayLater)
Although each BNPL service has its own perks and shortcomings, the choice ultimately comes down to personal preference. Not all BNPL services are offered by a particular merchant or platform, so merchant selection is also a significant factor.
Personally, I would only consider making a purchase on credit when I’m certain that I have the bucks for gradual repayments. It’s a way to avoid spending beyond my means.
All of my assets and liabilities (including earnings and debts) are recorded on a spreadsheet to keep track of my expenses. This is so I can quickly assess my financial standing.
On the merchants’ side, these facilities are known to help drive in more sales, and it would be considered a good marketing strategy, resulting in better economic circulation.
However, with the cost-of-living crisis dominating the news, consumers should be more responsible and cautious with their spending, and it is essential for us to better comprehend our own wants and needs.
- Read other BNPL articles we’ve written here.
Featured Image Credit: Vulcan Post