Stricter Guidelines for Advertisements of "Buy Now, Pay Later" Schemes
Ministry of FinanceSpeakers
Summary
This question concerns Ms Nadia Ahmad Samdin’s inquiry regarding the necessity of stricter advertising guidelines for Buy Now, Pay Later (BNPL) schemes to protect young consumers from influential social media marketing. Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong replied that accredited firms must follow a Code of Conduct developed with the Monetary Authority of Singapore to ensure advertisements are clear and compliant with fair trading laws. The Code mandates fee disclosure, prohibits "risk-free" claims, and aligns with guidelines from the Advertising Standards Authority of Singapore and the Consumer Protection (Fair Trading) Act 2003. Additional safeguards include restricting services to those aged 18 and above, prohibiting compound interest, and providing financial education through MoneySENSE to encourage responsible borrowing. The Government considers these measures appropriate and proportionate for now, while the Monetary Authority of Singapore continues to monitor the sector and review the regulatory framework as necessary.
Transcript
1 Ms Nadia Ahmad Samdin asked the Prime Minister and Minister for Finance whether the Government assesses a need to introduce stricter advertising guidelines for Buy Now, Pay Later (BNPL) schemes similar to the regulations for advertisement on gambling or high-risk financial products in view that BNPL providers heavily market their services on social media and often use influencers to promote instalment payments on discretionary spending, such as fashion, travel and entertainment, to young consumers who may be particularly susceptible to these psychological nudges.
Mr Gan Kim Yong (for the Prime Minister): Buy Now, Pay Later (BNPL) firms operating in Singapore have committed to the industry-led BNPL Code of Conduct (Code), that was developed under the Monetary Authority of Singapore's (MAS') guidance, to mitigate the risk of debt accumulation and protect consumer interests. Under the Code, accredited firms commit to ensuring that advertisements on BNPL services are clear and not misleading in any way, such as through inaccuracy, ambiguity, exaggeration, omission or otherwise. The advertisements must also clearly disclose any fees or late charges, and not imply that BNPL services are "risk-free" or suitable for all customers. Accredited firms must also ensure that their advertisements on BNPL services comply with the Consumer Protection (Fair Trading) Act 2003 as well as the advertising codes set out by the Advertising Standards Authority of Singapore.
The guidelines on fair marketing are complemented by other safeguards in the Code that limit debt accumulation through BNPL, such as not charging compound interest, suspending users who fail to make repayments on time, and committing to only offer BNPL services to those aged 18 and over. MAS had provided further details on these safeguards in its reply to a Parliamentary Question in February this year. [Please refer to "Reports of Non-compliance with Buy Now, Pay Later (BNPL) Code of Conduct and Data on BNPL Customers", Official Report, 4 February 2025, Vol 95, Issue 150, Written Answers to Questions section.]
Financial education efforts through MoneySENSE also seek to empower consumers to make informed and responsible borrowing decisions.
We assess this approach to be appropriate and proportionate for now. MAS continues to monitor developments in the BNPL sector and will review its regulatory framework as appropriate.