What Is Buy Now, Pay Later (BNPL) for Online Stores?

Buy Now, Pay Later (BNPL) lets a shopper buy something now and pay for it later, in a single payment or in installments, often interest-free. In the words of Malaysia's Consumer Credit Commission, it lets consumers "purchase goods or services now and pay later". Your store is paid upfront by the BNPL provider, minus a fee. The provider then collects the installments from the customer. In Malaysia, offering it is now a licensed activity under the Consumer Credit Act 2025.

How does BNPL work?

BNPL works by putting a third party between you and the shopper. Three parties are involved: the customer, your store, and the BNPL provider.

The provider pays you the full price upfront, minus a merchant fee. The customer repays the provider over time, usually in three or four installments, often interest-free.

The provider carries the credit risk, not you. If the customer stops paying, that is the provider's problem to chase, because you already have your money.

For the shopper, the appeal is spreading the cost with no interest. For the store, the appeal is a bigger cart and fewer abandoned checkouts. That is why BNPL sits close to the cart-abandonment problem every online store faces.

Which BNPL providers can a Malaysian store offer?

A Malaysian store can offer BNPL through several established providers. The most common are Atome, SPayLater (from Shopee), Grab PayLater, and Boost PayFlex.

Each works in a similar way at checkout. The shopper picks the BNPL option, the provider approves them in seconds, and the plan is set up on the provider's side.

You add BNPL the same way you add other payment methods: through your payment gateway or a provider plugin. It becomes one more button at checkout, alongside cards, FPX bank transfer, DuitNow QR, and e-wallets. Setting up all of these is part of accepting online payments in Malaysia.

What does BNPL cost a merchant?

BNPL costs the merchant a fee on every transaction, taken from the amount the provider pays you. This is a merchant discount rate, the same idea as a card fee, and it is often higher than a domestic card fee, though it varies by provider.

Rates vary by provider and by gateway. Some payment gateways publish their BNPL rates, while a direct deal with a provider is often quoted per merchant, so compare both before you choose.

	BNPL	Paying by card
Store paid	Upfront, minus a fee	Upfront, minus a fee
Customer pays	In installments, interest-free	In full now
Who approves	The BNPL provider	The customer's bank
Merchant fee	Often higher, varies by provider	Varies by gateway and card type

Exact rates vary by provider and gateway; check your gateway's published rate card.

BNPL fees often sit above a domestic card fee, which is the trade-off for the larger baskets it can bring. The reasons these fees exist are the same across every method: someone carries the risk and the processing cost.

Weigh the fee against your margin. On a low-margin product the extra points matter. On a higher-ticket item, the fee is often worth the sale you would otherwise lose to sticker shock.

In our experience, owners underestimate what a store costs to run, and per-transaction fees are among the easiest costs to miss when planning margins.

Is BNPL regulated in Malaysia?

Yes, BNPL is now regulated in Malaysia under the Consumer Credit Act 2025. The Act was "gazetted on 31 December 2025 and came into force on 1 March 2026" (SKP, March 2026). It created the Consumer Credit Commission (Suruhanjaya Kredit Pengguna, SKP) as the regulator.

Under the Act, BNPL companies must obtain a license from the SKP. Licensing took effect on 1 June 2026, with a transition period to 30 November 2026 for existing providers to apply. Providers that apply in time may keep operating while the SKP decides.

For a store owner, the practical upshot is simple: offer BNPL through a provider that is licensed by, or has applied to, the SKP. Bank-run schemes are regulated by Bank Negara Malaysia instead. A regulated provider is one accountable to its regulator, which matters for both your compliance and your customers' protection. This sits alongside the other legal requirements for running an online store.

Frequently asked questions

Does offering BNPL increase sales?

It often does, mainly by reducing checkout drop-off and lifting the average order value. Shoppers who hesitate at a full price sometimes complete the purchase when they can split it into installments. The gain has to be weighed against the merchant fee, so BNPL tends to pay off best on higher-ticket items where one recovered sale covers many fees.

Do I pay interest or fees as the merchant?

You pay a merchant fee on each BNPL transaction, deducted from the amount you receive. You do not pay interest, because it is the customer's plan, not yours. The provider makes its money from your merchant fee and, depending on the plan, from fees or late charges to the customer. That is why the merchant rate often runs higher than a normal card fee.

Is BNPL safe for my customers?

Many BNPL plans charge no interest when paid on schedule, but customers who miss installments can face late fees and mounting debt. That consumer-protection concern is exactly why Malaysia now regulates it under the Consumer Credit Act. Choosing a regulated provider gives your customers the protections the Act requires, which is better for them and for your reputation.

How do I add BNPL to my website?

You add BNPL through your payment gateway or a provider's plugin, the same way you enable cards or e-wallets. Most gateways and store platforms already support the main Malaysian providers. The setup is a technical step at checkout, not a rebuild, so it fits onto an existing online store without much extra cost.

Is BNPL the same as a credit card installment plan?

They are similar in spirit but come from different places. A card installment plan runs through your bank on an existing credit card. BNPL is offered by a separate provider and often needs no credit card at all, which widens who can use it. Both let the customer pay over time; only the provider and the approval differ.

Deciding whether to offer it

Storming Solutions builds and maintains online stores in Kuala Lumpur, and we set up the payment methods that go with them, BNPL included. We would rather help you match the payment options to your margins and your customers than switch on every button because it is available.

Thinking about adding Buy Now, Pay Later to your store? Tell us what you sell over WhatsApp or book a short call, and see what a store build includes on our web development page.