BOT eyes Buy Now Pay Later curbs as young spenders sink into debt

The Bank of Thailand is preparing to regulate Buy Now Pay Later lending more closely, warning that fast-growing instalment credit could push young consumers into debt earlier and worsen non-performing loans if left unchecked.

BOT governor Vitai Ratanakorn said BNPL itself should not be treated as a “villain”, but the central bank is concerned about lending models that make it too easy for some groups, particularly young people, to borrow for unnecessary consumption.

Similar concerns have also prompted regulators in several countries to bring BNPL services under closer supervision.

Vitai said Thailand currently has about 25 million people in debt.

Among people aged 20-35, more than half, or 52.7%, already carry debt, while 27% of that group’s debt is classified as non-performing loans.

He described the figures as worrying because early debt distress can damage long-term financial opportunities and quality of life.

BNPL accounts surge to nearly 5 million

The BOT has data from eight major BNPL operators showing rapid growth in this form of credit.

BNPL accounts rose from only 600,000 in 2021 to 4.91 million by the end of 2024, expanding at almost 100% a year.

Transaction value has also grown by an average of 38% a year, while the number of BNPL accounts is expected to exceed 5-6 million in 2025. The expansion has been particularly visible among younger users and first-jobbers.

Vitai said the BOT was uneasy about people taking on debt too early, especially if those debts later become NPLs. He pointed to some concerning BNPL behaviour, including instalment payments for low-value items such as a 106-baht bubble tea or a 50-baht chicken rice meal, with repayment stretched over four months.

He said such behaviour could encourage early debt habits, while some interest rates were as high as 16-18%.

Minimum age and product limits under review

BNPL providers often operate through two business models.

The first involves licensed digital lending operators, which can use alternative data to assess borrowers, extend loans of up to 20,000 baht and charge interest of up to 25%.

The second group operates under the Civil and Commercial Code, allowing loans above 20,000 baht but with interest capped at 15%.

For future regulation, the BOT does not intend to supervise platforms directly, but will focus on the companies providing credit under both models.

Measures under consideration include setting a minimum user age, determining which types of products are appropriate for BNPL, and adding consumer-protection rules to prevent future debt problems.

The new oversight will require an official BOT announcement, drawing on the central bank’s authority under several laws to regulate emerging financial businesses.

Initial consideration is expected to take four to five months, with rules due to be announced before the end of this year.

Vitai said the BOT previously did not supervise lending outside commercial banks, state banks and non-bank financial firms. However, online-platform-based credit now requires attention because it can affect consumption, debt quality and future NPLs.

He stressed that BNPL companies were not being labelled as wrongdoers, but said regulation was needed to protect children, people unable to repay, and consumers encouraged to buy unnecessary products through instalment plans.

BOT sees GDP growth possibly reaching 2%

On the wider economy, Vitai said the 400-billion-baht executive borrowing decree could provide a meaningful boost this year.

The BOT believes the measure could lift economic growth to as much as 2%, compared with its earlier estimate of 1.5%.

The main driver would be stronger consumption, expected to grow by 2.6%.

The “Thais Help Thais” measure, which starts this month, is also expected to help third-quarter GDP expand by as much as 3.2%.

However, the stimulus is also expected to add to inflationary pressure.

With oil and energy prices already pushing up costs, full-year inflation is projected at 2.9%.

In some periods, particularly around October or the third quarter, inflation could rise to 5.0-5.2% due to stronger consumption and the oil-price base effect.

The BOT expects this to be temporary, with inflation easing to 1.4% next year.

Vitai said the central bank is also closely monitoring NPLs, especially among SMEs and retail borrowers affected by the economic slowdown.

Although there are no alarming signs yet, the BOT accepts that NPLs could rise and has gradually introduced support measures, including SME Boost, credit-access support and preventive debt measures.

Platforms say screening is already strict

A source from an online shopping platform said BNPL services are now widely used in Thailand, particularly through major e-commerce players such as Shopee and Lazada.

Shopee’s SPayLater instalment service is provided by Monee Capital Co Ltd, part of SeaMoney under Sea Group.

It also offers digital personal loans under SEasyCash, with interest capped by the BOT at 25% a year.

SPayLater is already under BOT supervision and links users’ financial history with the credit bureau to help determine instalment and loan limits.

The source said the service uses multiple layers of safeguards, including detailed user screening, repayment-capacity assessment based on several data dimensions, appropriate credit limits based on repayment history and individual risk, and a dedicated credit team that monitors customers more closely than general fintech firms.

Lazada Thailand chief executive officer Varitha Kiatpinyochai said LazPayLater is an important tool for driving sales, increasing orders and raising basket size, particularly for high-value goods and electrical appliances.

However, she said it must be managed carefully to avoid worsening household debt.

She said Lazada focuses on sustainable growth and applies strict screening through credit assessments using artificial intelligence, past spending behaviour and repayment history before approving credit limits.

The company operates within the law and is ready to comply with government rules, while any fee adjustments are made transparently, clearly and with advance notice, taking buyers and sellers into account.