The Financial Services Authority (OJK) of Indonesia is drafting a new set of regulations specifically aimed at companies offering Buy Now, Pay Later (BNPL) services. These companies, primarily in the financing sector, have been growing rapidly in the digital economy, but concerns about consumer protection and data security have prompted the OJK to intervene. The new regulations will establish clear guidelines for how BNPL services should be managed, ensuring that companies adhere to sound business practices while prioritizing consumer protection.

Currently, BNPL services offered by financing companies are still subject to the existing rules under OJK's Financial Services Authority Regulation (POJK) No. 35/POJK.05/2018, which was amended in 2022. However, the OJK recognizes the need for a more specific framework tailored to the unique characteristics of BNPL services. Agusman, Head of the OJK's Supervision of Financing Institutions, Venture Capital, and Microfinance, explained that the new regulations will address several key issues, including the requirements for companies to operate BNPL services, information system ownership, and personal data protection.

The regulations will also cover important areas like audit trail management, system security, risk management, and partnerships with third-party entities. These measures are designed to ensure the integrity of BNPL services while safeguarding consumers. One of the key goals of these regulations is to foster the growth of the BNPL industry in a healthy and sustainable manner. As Agusman noted, the rapid rise of BNPL financing services in Indonesia is largely driven by the growing digital economy, which has made this payment method increasingly popular, especially among young consumers.

As of September 2024, the outstanding BNPL receivables from financing companies had seen an impressive year-on-year growth of 103.4%, reaching a total of IDR 8.24 trillion. While this figure is lower than that of BNPL services in the banking sector, which had a total of IDR 19.81 trillion, it reflects the fast-growing appetite for BNPL solutions in Indonesia. The sector is expected to continue expanding as more consumers turn to digital financing options.

The OJK’s focus on regulating BNPL services is timely, as the industry’s growth is expected to continue in tandem with the digital transformation of the economy. However, ensuring that the growth of BNPL remains sustainable and consumer-friendly will require careful regulation and robust oversight. By introducing these new rules, the OJK aims to provide a framework that allows BNPL services to thrive while minimizing the risks associated with this rapidly evolving financial product.

BISNIS.COM