The BNPL Code of Conduct aims to protect consumers and ensure that BNPL offerings benefit Singapore’s ecosystem

SINGAPORE, 20 October 2022 – The Buy Now, Pay Later (BNPL) Working Group, formed by the Singapore FinTech Association (SFA) and industry players including Atome, Grab Financial Group and ShopBack, under the guidance of the Monetary Authority of Singapore (MAS), today launched its Buy Now, Pay Later Code of Conduct (BNPL Code). The BNPL Code sets out guidance for BNPL service providers in Singapore to protect consumers and ensure that BNPL offerings will continue to benefit the ecosystem.

As part of its aim to safeguard consumers against over-indebtedness, the BNPL Code signifies the industry’s commitment to abide by a fixed set of standards. It aims to crystallise best practices including:

  • Creditworthiness safeguards: Each BNPL provider will permit customers to accumulate no more than SGD2,000 in outstanding payments at any given time, unless they complete an additional credit assessment. This additional credit assessment must consider, among others, (i) customer income information and (ii) customer credit information shared across all BNPL firms. BNPL providers will also suspend a consumer’s access and use of its BNPL services, upon his/her failure to meet any payment obligations.
  • Fair, transparent fees, and clear disclosures: BNPL providers will cap all fees, including late fees and other charges. Fees and interest, if any, will not be compounded. All fees and fee-related structures will also be communicated in a manner that is clear and transparent to customers. Consumers are also entitled to make full repayment with BNPL providers at any time, without early repayment fees. BNPL providers will each ensure that consumers have access to account statements consolidating the total outstanding balance of purchases made through the respective BNPL provider.
  • Ethical marketing practices: BNPL providers will ensure that advertisements of products and services comply with the relevant advertising codes. BNPL providers’ advertising and promotional materials will be clear and not misleading or deceptive.
  • Accommodation for voluntary exceptions: BNPL providers will allow consumers to voluntarily exclude themselves from BNPL services and promotional materials once this has been communicated via writing. Providers will retain a list of the customers who have voluntarily excluded themselves from their services.
  • Financial hardship assistance: BNPL providers will consider extending hardship assistance to consumers facing financial hardships to work out a mutually acceptable payment arrangement with them. During this time, BNPL providers will not allow any further transactions. BNPL providers commit not to initiate bankruptcy proceedings against their customers.

To encourage the adoption of and ensure compliance with the BNPL Code, BNPL providers will be required to undergo an audit and accreditation process which will allow them to display an accredited trustmark showing customers that they are compliant with the BNPL Code.

The next phase of rollout which includes setting up of the credit information sharing bureau, completing the accreditation process, and awarding the trustmark to accredited BNPL providers, is expected to be completed in late 2023.

Commenting on the launch of the BNPL Code, Ms Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime), MAS, said “The BNPL Code sets out important industry-agreed standards and safeguards to mitigate the risk of debt accumulation and protect the interests of users. We thank the SFA and members of the BNPL Working Group for working together to develop the Code and look forward to the industry’s effective implementation of the standards. We will continue to monitor developments in the BNPL sector and work with the industry to address any risks to consumers.”

Mr Shadab Taiyabi, President of the SFA, stated: “The launch of the BNPL Code represents a significant step forward within the industry to ensure that the consumers’ interests are prioritised. Given the growth potential of the BNPL industry in Singapore, we are confident that the BNPL Code will be able to set the standards for existing and future providers in Singapore, fostering greater trust and transparency between these providers and the consumers they serve.”

Ms Leanne Lim, Regional Head of Compliance, Atome, said: “The BNPL Code heralds an important phase for the industry in Singapore, and we are honoured to have contributed to its formation, under the SFA’s and MAS’s guidance. We remain committed to continue working with industry stakeholders to monitor developments, promote financial, social, and digital inclusion while safeguarding consumer interests.”

Mr Wong Wenbin, Head of Grab Financial Group Singapore, said: “We are pleased to have partnered with the SFA, MAS as well as fellow industry players in the development of the BNPL Code of Conduct for Singapore. The BNPL Code puts in place clear guidelines for consumer protection and a framework that enable service providers to continuously innovate to better serve the different consumer needs. We believe this is a signal that the industry is maturing, and we hope it will help to accelerate financial inclusion. Ultimately, this will benefit users as providers like us can push the boundaries of innovation through technology within set parameters that protects our consumers.”

Mr Arvin Singh, Co-founder, hoolah and Vice President of Payments and Partnerships, ShopBack said: “The establishment of the BNPL Code marks a significant milestone and a major step forward for the industry in Singapore. We are committed to continuing this work alongside SFA and industry peers to ensure the best experience for consumers while growing the BNPL ecosystem sustainably.”