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OJK to set age, income criteria for BNPL users
The OJK plans to issue a new regulation on BNPL services that requires users to be over 18 and have a monthly income of at least Rp 3 million in a bid to control the popular payment method and protect consumers against falling into a debt spiral.
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A man walks past the Financial Services Authority (OJK) in Central Jakarta on May 15, 2013. (Tribunnews/Herudin)
T
he Financial Services Authority (OJK) plans to impose minimum age and income requirements for users of buy now, pay later (BNPL) financing services in a forthcoming regulation.
Both lenders and borrowers must be aged at least 18 years or married while borrowers must earn monthly wages of at least Rp 3 million (US$185.29) in the new requirements, to be implemented by Jan. 1, 2027 at the latest for both existing customers looking to extend financing deals as well as new customers.
The plan to regulate BNPL services offered by finance companies aimed to enhance protection for consumers and the general public, prevent debt traps as well as develop and strengthen the financial services industry, OJK spokesperson Ismail Riyadi said in a press release on Tuesday.
Ismail also urged finance companies to notify debtors about the need to exercise caution in using BNPL services as well as to record their debtors' transactions in the OJK’s Financial Information Service System (SLIK).
Read also: New OJK warning on P2P lending apps leaves users unfazed
The OJK previously mandated peer-to-peer lending (P2P) platforms to display visible warnings on their websites and apps as a way to discourage people without the capacity to repay their debts from taking out new loans.
That policy was issued amid rising scrutiny of consumer behavior related to online lending platforms, including some borrowers who turned to crime to repay their loans.
