Thailand is weighing tighter buy now, pay later (BNPL) rules as instalment payments move deeper into everyday consumer spending.
Bloomberg reported that the Bank of Thailand is preparing oversight measures for BNPL providers as regulators worry that quick access to online credit could add to household debt pressures.
Governor Vitai Ratanakorn has warned that consumers are now using BNPL for small daily items, including drinks and meals, not only higher-ticket purchases.
He said this could encourage people to spend before they have the money to pay.
Thailand’s household debt stands at about 87% of gross domestic product, among the highest levels in Asia. Much of that debt is tied to consumption, leaving borrowers more exposed to income shocks.
Vitai estimates that BNPL accounts rose to about six million last year, nearly ten times the level in 2021.
Small-Ticket Spending Raises Debt Concerns
The growth has been driven by e-commerce, mobile payments and checkout options that let shoppers turn purchases into instalment plans almost instantly.
Short-term plans often advertise zero interest, but longer instalments can carry annual interest rates of up to 25%.
The central bank is drafting rules for BNPL providers that offer instalment loans through online platforms.
Possible measures include age and income restrictions, limits on eligible products, minimum purchase values and caps on charges. The rules could be issued by the end of the year.
The regulatory push comes as Thai households face renewed pressure.
Average monthly household income fell 2.5% last year to 28,308 baht, the first decline since 2019, according to the National Statistical Office. Household spending dropped 5.4%.
Economists say BNPL may ease temporary cash flow pressure, but it also risks encouraging unnecessary spending and pushing repayments into the future.
Featured image: Edited by Fintech News Singapore, based on image by viktoryvisuals via Magnific
