SINGAPORE – The six providers of “buy now, pay later” (BNPL) services here have begun the process of earning accreditation by adhering to a new code of conduct set up for the sector.
The progress of the firms – Ablr, Atome, Grab, LatitudePay, SeaMoney and ShopBack – will be assessed over the next few months, and the successful players will get the accredited Trustmark in early 2024.
Any new market entrants will also have to comply with the code before they can offer BNPL services, noted the Singapore Fintech Association (SFA) on Thursday.
The code of conduct was launched in October 2022, and outlines best practices that service providers must follow with the aim of ensuring consumers do not chalk up excessive debts.
It stipulates that BNPL providers can offer their services only to customers over 18 years of age. Providers must also ensure that customers do not accumulate more than $2,000 in outstanding payments at any one time, unless they have fulfilled additional credit assessment criteria.
There are other safeguards, including a cap on late fees and stipulations that advertising and promotional materials must be clear and not misleading or deceptive.
PwC, one of the big four accounting firms, will assess the BNPL providers’ progress, with successful players allowed to display the accredited Trustmark on their websites and other marketing collaterals from April 1.
BNPL providers will have to be re-accredited three years after the Trustmark is awarded.
Mr Andrew Tan, executive director of the prudential policy department at the Monetary Authority of Singapore, said the Trustmark will ensure BNPL users transact only with compliant firms, so they do not end up mired in debt.
A credit bureau run by global information technology services company Experian will consolidate and share credit information with all BNPL service providers, including a customer’s outstanding balances across various providers.
An oversight committee comprising Mr Adrian Ang, a partner at law firm Allen & Gledhill, Singapore Retailers Association executive director Rose Tong, Mr Rolf Haudenschild from financial compliance firm Ingenia Consultants and Ms Tan Huey Min from Credit Counselling Singapore will monitor code compliance.
Ms Tan said the SFA will investigate complaints, after which the committee will assess the SFA report and decide if the BNPL player has violated the code and whether to remove its Trustmark.
SFA president Shadab Taiyabi said: “This code is now enforceable. This has all been done with the protection of consumers in mind.”
But Mr Zennon Kapron, director of fintech research and consulting firm Kapronasia, said there should be tighter regulations, adding that the code sets guidelines and relies on the players to comply.
“To truly ensure the stable growth of the industry, regulators themselves will need to promulgate regulations that govern the sector,” he added.
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