Published on 29 Mar 2024

5 buy now, pay later players to get accredited in April after minor shake-up in industry

Five providers of buy now, pay later (BNPL) services are on track to get accredited and will be able to display from April 1 a trustmark which shows that they have been assessed to be in compliance with the BNPL Code of Conduct.

The five are Atome, SeaMoney, Grab, LatitudePay and, said Mr Shadab Taiyabi, president of the Singapore FinTech Association (SFA), in response to queries from The Straits Times.

BNPL allows consumers to make purchases and spread their payments over a few months without having to incur interest on the outstanding amount.

The SFA had announced in November 2023 that six players - Ablr, Atome, Grab, LatitudePay, SeaMoney and ShopBack - were on track for accreditation.

There has been a small shake-up in the industry here since. ShopBack and Ablr pulled out, while a new company,, joined the group seeking accreditation.

ShopBack said in early March that it will discontinue its PayLater service in Singapore and Malaysia.

Ablr told ST that it "will be replaced by another company", which ST understands to be

Fintech firm chief executive Ian Ow has confirmed that his company is in the process of obtaining the industry trustmark.

In August 2023, Pace, an up-and-coming BNPL fintech firm, went into voluntary liquidation after it was unable to continue business operations because of its liabilities.

Mr Tristan Chiappini, vice-president for the Asia-Pacific region at PPRO, said it is "very normal" for players to come and go in the payments business.

PPRO provides digital payments infrastructure that facilitates cross-border digital payments transactions.

"Who is to say that ShopBack won't bring back BNPL in a year's time," he said.

BNPL was introduced to Singapore in 2017 by three Nanyang Business School alumni. Their start-up, Rely, was the first to offer consumers such interest-free instalments. Rely was subsequently acquired by Pace in March 2022.

It was only during the Covid-19 pandemic that the payment method really took off as spending moved online, Mr Chiappini said.

For instance, some people had to buy items that they did not budget for, such as a desk or a workstation, so that they could work from home, he said. They turned to BNPL as it lets them break down big-ticket purchases into a few smaller interest-free payments. Atome is among the five players on track to get accredited on April 1.

Wealth manager Ruchel Seow, 24, was among those who were drawn to BNPL.

She said she could pay for her laptops or make hotel bookings without feeling the "pinch of big purchases".

She has since stopped using this payment mode and would rather not buy the item if she "cannot pay it off in full on the spot".

She added that she was enticed by the discount vouchers that BNPL players were giving out, which helped to offset her bills. But the vouchers have since dried up, she said.

Some users continue to find BNPL useful.

Ms Kelly Chiew, a 30-year-old mother of a young child, said children get sick often and this can result in high medical bills, which affect daily living expenses.

With the BNPL option, it is easier to buy items like a washing machine or a refrigerator, especially when the budget is tight for that month, she added.

SFA's Mr Taiyabi said it is this financial flexibility which makes BNPL popular among the younger generation.

Mr Elijah Lee, a senior financial services manager at Phillip Wealth Advisory, said he can understand how BNPL might help with cash flow since it is spread over an extended period.

Still, he said it might make more financial sense to plan ahead and save up for a purchase, adding that the individual can, at the same time, assess if an item is a need or a want.

The SFA and the BNPL industry have safeguards to mitigate the risk that consumers might overspend and end up in debt.

The BNPL code of conduct states that each BNPL provider cannot let its customers chalk up more than $2,000 in outstanding payments.

As another safeguard, BNPL players will levy late payment fees on consumers and suspend their BNPL services. This ensures consumers who are overdue cannot make further purchases until they have met their payment obligations.

As an example, Atome charges an administrative fee of between $15 and $30 for each late bill payment, while SeaMoney's SPayLater charges a late fee of $5 for each month that the payment is overdue.

In South-east Asia, BNPL payments are set to grow 38 per cent by 2027 to US$15.6 billion (S$21 billion), according to a 2023 IDC report on how Asia buys and pays.

As the industry continues to grow, BNPL players will do more to gain market share.

Atome, for example, has expanded to offer a range of digital financial services - insurance, cards and loans - on its platform.

The firm said on March 20 that it will work with Chubb to develop a range of insurance products for customers in Singapore, Malaysia, the Philippines and Indonesia.

A spokesperson added that Atome already offers short-term loans in the Philippines and Indonesia.

BNPL remains the core of its business and the Atome spokesperson said the bulk of revenues still come from the fees merchants pay for using its BNPL services.

Some BNPL players have moved to offer longer payment terms as a draw.

Mr Chiappini said this gives consumers the option to spread payments over a longer period, making the purchase more manageable, so now there is "a little less barrier to them actually clicking buy".

In Singapore, Atome offers a usual three-month payment period as well as a six-month option.

SeaMoney has payment terms that extend to a year. Customers also enjoy discounted rates if their seller merchants are on the special SPayLater programme.

However, the BNPL offerings come at a cost for the merchants, which will have to pay more fees to the BNPL players to provide their customers with the incentives.

Mr Chiappini said merchants will be willing to pay the higher fees when they see that the customer is spending more on their website or at the store.

"It takes a lot for a merchant to get a consumer to their website. It takes even more for them to get a consumer to actually put something in the checkout basket.

"Anything that can increase the number of people who finally say 'Yes, I am going to pay with this payment method' is very valuable to the merchant."

Source: The Straits Times