Thai Central Bank Targets ‘Buy Now, Pay Later’ Sector Over Growing Systemic Risk
The Bank of Thailand moves to close regulatory loopholes as the surge in ‘invisible’ BNPL debt threatens to undermine national financial stability
- The Bank of Thailand is targeting the 'Buy Now, Pay Later' (BNPL) sector, viewing its rapid growth as a systemic risk to the country's financial stability.
- A key issue is a regulatory loophole where BNPL transactions are not legally classified as "loans," placing them outside the central bank's direct supervision and allowing "invisible" debt to grow.
- This off-the-books debt is not reported to the National Credit Bureau, which masks the true level of household debt and increases the risk of consumers becoming over-leveraged.
- The central bank's primary goal is to close this loophole by bringing BNPL providers under its regulatory framework to integrate hidden debt into official credit assessments and standardize risk management.
The Bank of Thailand moves to close regulatory loopholes as the surge in ‘invisible’ BNPL debt threatens to undermine national financial stability.
The Governor of the Bank of Thailand (BOT), Vitai Rattanakorn, has signalled a tightening of law enforcement and oversight for ‘Buy Now, Pay Later’ (BNPL) services, warning that the sector's rapid growth poses a mounting threat to the country’s financial system.
Under current Thai law, BNPL transactions are not technically classified as "loans", meaning they operate outside the direct jurisdiction of the central bank.
However, the BOT has expressed concern that these services have evolved into a significant systemic risk that requires urgent intervention.
The central bank’s primary concern is that BNPL debt currently exists "off the radar".
Unlike traditional credit, these transactions are not reported to the National Credit Bureau, preventing a comprehensive assessment of household debt levels.
"We are beginning to see heightened risks from BNPL as transaction volumes surge," Governor Vitai stated. "Because these businesses do not provide direct loans in a legal sense, they aren't under BOT oversight. Our priority is to find a pathway to bring them under our supervision to close these structural loopholes."
The "instant credit" nature of BNPL has made it particularly popular on e-commerce platforms, appealing to young professionals and "first-jobbers".
Industry experts note that the ease of application often leads consumers to accumulate debt without realising the long-term impact on their financial health.
By bringing BNPL under a formal regulatory framework, the BOT aims to:
- Integrate hidden debt into official credit assessments.
- Prevent "debt bombs" caused by consumers over-leveraging across multiple platforms.
- Standardise risk assessment to ensure providers are not lending recklessly.
Despite the central bank’s warnings, major players in the Thai market—including Shopee’s SPayLater and Lazada Paylater—maintain that their systems are robust.
Supphavit Hongamornsin, Thailand Country Manager for Monee (a Sea Group subsidiary), told Krungthep Turakij that SPayLater uses multi-dimensional data and deep-learning to screen users.
"We set responsible credit limits based on spending behaviour and repayment history. Our measures are designed to prevent users from taking on excessive financial burdens," he said.
Similarly, Varitha Kiatpinyochai, CEO of Lazada Thailand, confirmed that while their Paylater service is growing—especially in the electronics category—the company employs dedicated teams to ensure credit risk is managed strictly.
The BOT has acknowledged that implementing these new regulations will take time, as it requires a fundamental shift in how different state agencies collaborate to monitor these evolving financial mechanisms.
