Singapore’s Buy Now, Pay Later (BNPL) Code of Conduct, designed to protect consumers and promote responsible lending in the BNPL sector, has entered its next phase of implementation. A working group of BNPL companies in Singapore is ensuring that existing players adhere to the code’s provisions from November 1, 2023, and obtain accreditation by March 31, 2024. New entrants to the BNPL sector must also follow the same process before offering BNPL services.

The BNPL Code was introduced by the Singapore FinTech Association and key industry players in October 2022, under the guidance of the Monetary Authority of Singapore. Six BNPL companies are currently operating under the code: Ablr, Atome, Grab, LatitudePay, SeaMoney, and ShopBack.

The BNPL Code includes various safeguards to prevent consumer over-indebtedness. These safeguards encompass conducting creditworthiness checks, maintaining transparent and fair fee structures, adhering to ethical marketing practices, providing voluntary exclusion options, and offering financial hardship assistance to customers. Additionally, IT services company Experian has established a private credit bureau to facilitate the sharing of credit information among BNPL providers. An oversight committee has been established to supervise and monitor compliance with the code.

To ensure compliance, the BNPL companies will undergo an independent audit. The first assessment for compliance will be conducted by PricewaterhouseCoopers, one of the world’s leading audit firms.

Once BNPL providers are confirmed as compliant, they will be granted a trustmark, which is valid for three years. This trustmark will be prominently displayed on the providers’ websites and other promotional materials starting from April 1, 2024.

The BNPL Code of Conduct in Singapore is a significant step toward fostering consumer protection and responsible lending practices in the fast-growing BNPL industry, ensuring a safer and more transparent experience for consumers.