Buy now, pay later (BNPL) services have swiftly risen in popularity in Thailand, riding the wave of e-commerce expansion and the appeal of flexible payment options that let consumers purchase now and settle later in instalments.
While BNPL services promote financial inclusion and increase sales for businesses, they also pose a significant threat to consumers and the financial system. A major concern is potential misuse for informal lending or by loan sharks, which could deepen household debt and increase default rates.
In addition, BNPL encourages impulse spending and overspending, trapping consumers in debt cycles. Late payments can lead to additional fees and damage credit scores, while the growing number of BNPL defaults has heightened concerns over fraud and consumer protection.
These challenges led Thai regulators to issue warnings and push for tighter risk management and regulatory safeguards to address the dangers associated with BNPL services.
The National Economic and Social Development Council (NESDC), the government’s planning unit, recently expressed concern over the growing trend of BNPL use, especially on online platforms, spreading to cover food and fuel expenses, encouraging households to take on excessive debt.
Danucha Pichayanan, secretary-general of the NESDC, warned that if people need to pay for food or fuel in instalments, it is a sign of crisis and the government should step in and find ways to address this issue.
Such expenses should be paid in full, not instalments, he said. This expansion of BNPL practices will intensify and further strain the country’s household debt burden, said Mr Danucha.
REASONABLE CONCERN
Kanjana Chockpisansin, head of banking and financial sector research at Kasikorn Research Center (K-Research), said if households increasingly turn to BNPL programmes, it could worsen debt repayment capacity and aggravate the country’s household debt problem.
The digital personal loan portfolio supervised by the Bank of Thailand accounts for only a marginal share of total outstanding retail loans in the banking industry.
Guided by the regulator’s responsible lending framework, financial institutions have adopted a more cautious stance towards expanding new loan portfolios.
BNPL services fall under the digital personal loan licence regulated by the central bank, which caps interest rates at 25% per year. Eleven business operators hold this licence.
However, other operators provide BNPL-type services under different regulatory frameworks, such as the Act Prohibiting the Charging of Excessive Interest Rates, which sets a maximum interest rate of 15% per year.
A MISSING LINK
Nattaporn Triratanasirikul, deputy managing director at K-Research, described BNPL as a “missing link” in Thailand’s loan portfolio because banks cannot factor these debts into assessments of borrowers’ repayment capacity.
She said BNPL requires closer monitoring because it encourages consumers to spend beyond their income.
“Thai households cannot generate higher earnings while the economy underperforms compared with neighbouring countries. Without income growth, BNPL becomes a risk as it pushes consumers to spend more on non-essential items,” said Ms Nattaporn.
She said the low instalment offers make the problem worse.
“Some platforms allow payments as low as 60 baht per instalment. Consumers perceive this as negligible and are willing to buy things they don’t really need,” said Ms Nattaporn.
“However, when combined the total obligation becomes significant.”
While repayment ultimately depends on individual financial discipline, companies view BNPL as a way to capture consumer spending during the economic slowdown.
She urged regulators to track BNPL obligations and integrate them into official loan data to offer a clearer picture of household debt and help banks make more informed lending decisions.
“BNPL is still in its early stages with only a few players. But if the business grows and proves profitable, more providers will enter and the risks will inevitably rise,” said Ms Nattaporn.
BUSINESS TACTICS
Not all analysts share the NESDC’s alarm. A former senior energy official who requested anonymity argued that a mobile app allowing people to pay for fuel in instalments is reasonable, but it must be backed by proper debt control and management to prevent new financial problems.
“This type of loan is necessary at a time when many people have limited funds to buy goods and services,” said the former official.
With the sluggish economy dampening consumer spending, some households struggle to afford even basic necessities, let alone luxury items, noted the official.
Sompop Manarungsan, an analyst of the Chinese and American economies, said the rise of BNPL is driven largely by intensifying competition among businesses seeking to sustain sales amid a broader slowdown in consumer spending, both in Thailand and globally.
“The growing trend of BNPL consumption on online platforms, including for essentials such as food and fuel, is not a cause for concern. In my view, these practices primarily reflect businesses’ efforts to survive during a period of weak consumer demand,” he said.
Citing China as an example, Mr Sompop said the mainland is grappling with an economic slowdown due to weaker exports, largely stemming from the trade war with the US. In response, the Chinese government is working to lift domestic consumption to offset the decline in exports.
Despite these efforts, results have been limited, as many consumers remain wary about the country’s economic outlook. As a result, private consumption has stagnated at around 50% of GDP, significantly lower than the 70% recorded in the US.
Chinese businesses have turned to various strategies to increase sales. Some apps in China have adopted aggressive marketing tactics to expand market share, he said.
The competition is not limited to apps — other sectors such as electric vehicle producers, have also deployed aggressive marketing strategies to increase sales.
The situation escalated to a frenzy, causing Beijing to step in to prevent excessive price wars, said Mr Sompop.
“I believe this intense competition is the result of sharply slowing consumption, not just in China but worldwide, including in Thailand,” he said.
Under normal economic conditions, Mr Sompop said aggressive marketing might lead to overconsumption. But in today’s climate, widespread uncertainty is discouraging people from spending.
For companies such as Lazada, Temu and Shopee, declining sales pose an even greater threat, forcing them to expand their market share by all possible means — through giveaways, discounts, and a wide range of incentives to defend their positions, he said.
MORE OPTIONS
In Thailand, many restaurants accept a wide range of digital payments through electronic data capture machines, allowing customers to pay via credit and debit cards, QR PromptPay, or bank-issued QR codes. These transactions are subject to processing fees set by banks.
In recent years, payment options have expanded to include e-wallets such as ShopeePay, with some restaurants joining the SPayLater programme, which lets customers pay for meals in instalments. Participating chains include Shinkanzen Sushi, Suki Teenoi and Ohkajhu.
Thaniwan Kulmongkol, president of the Thai Restaurant Association, said the economic slowdown reduced people’s spending money. While many restaurants already accept credit cards, BNPL services give customers added flexibility, allowing them to manage higher meal costs during tough financial times.
Nattamon Pisankitvanich, managing director of BNN Restaurant Group, said most of her customers prefer PromptPay QR code payment, though ShopeePay is also available.
She said BNPL is simply another payment method for customers.
Ms Nattamon recalled one customer who said he could have paid the full bill, but chose an instalment plan instead, accepting the small interest charge.
“Because the interest was only a few baht, the customer felt paying in instalments was a practical choice,” she said.
INDUSTRY PERSPECTIVES
According to Supphavit Hongamornsin, country head at Monee Thailand, operator of the SPayLater service under Sea Thailand (formerly SeaMoney Thailand), BNPL adoption has grown steadily, especially among younger people just entering the workforce.
The flexible payment model is increasingly popular for both consumer goods and services, he said.
Monee designed simple and inclusive financial options that support both everyday needs and long-term wellbeing, said Mr Supphavit. The company’s credit products, including SPayLater, are intended to expand financial access while promoting healthy spending habits, according to Monee.
He said the company follows a responsible lending approach by offering clear terms, setting appropriate credit limits, and providing tools such as repayment reminders, expense tracking, and transparent cost breakdowns.
Financial inclusion also requires education. Monee invests in financial literacy through guides, partnerships, and tips embedded in the app to help customers make informed decisions, said Mr Supphavit.
The company also strictly adheres to the Bank of Thailand’s responsible lending guidelines.
“Monee communicates product details clearly, does not encourage excessive borrowing, and nudges customers towards financial discipline,” he said.
“For example, we promote auto-repayments, encourage full loan repayments, and offer loan restructuring programmes to troubled borrowers.”
Risk management is central to Monee’s operations, with a dedicated team monitoring credit risks and evaluating repayment capacity, said Mr Supphavit. Credit limits are set individually based on spending behaviour and repayment history.
“These measures help prevent excessive debt while supporting long-term credit flexibility,” he said.
CASH PREFERRED
Chotechuang Soorangura, vice-president of the Thai Travel Agents Association, said few tourists use BNPL or instalment plans for overseas holiday packages, as these transactions typically involve interest charges.
Most tour operators also prefer cash payments, offering additional discounts to clients who pay upfront, as the 3% processing fee from instalment programmes is seen as too costly relative to each package sold.
As tourism is not an essential expense, customers tend to reserve instalment payments for necessities such as medical bills, insurance or children’s education, he said.
According to Mr Chotechuang, people who opt for instalments are generally younger travellers, including first-time workers who lack sufficient savings for short-haul trips.
In contrast, long-haul travellers rarely use BNPL as they are financially stronger and instead seek cash discounts, he said.
USE OF VIRTUAL BANKS
Manop Sangiambut, chief financial officer at SCB X Plc, said virtual banks will play an important role in improving financial inclusion in Thailand.
He said the planned virtual banks are unlikely to worsen the country’s elevated household debt as a large share of borrowing is in the informal sector. The primary goal of virtual banks is to bring these borrowers into the formal financial system, said Mr Manop.
“While virtual banks will not directly ease household debt, they are unlikely to exacerbate it. They could help the situation if the central bank allows true risk-based pricing,” he said, adding regulatory clarity is needed to address the debt problem more effectively.
Mr Manop stressed the root cause of Thailand’s household debt, particularly among low-income groups, is stagnant income. Addressing it requires broader fiscal measures and coordinated government policies to lift earnings, he said.
Ithinan Watsuksanti, head of business development lending at Ascend Money, said more than half of potential virtual bank customers have either never applied for loan approval from a traditional bank or have been rejected, leaving them reliant on informal lenders.
“Virtual banks will use data and algorithms to lend responsibly, offering manageable credit lines that support customers, especially small businesses, without encouraging overborrowing,” he said.
Bringing these borrowers into the formal system will make lending traceable and accountable, thereby advancing financial inclusion, said Mr Ithinan.
The Finance Ministry recently approved three applicants to establish Thailand’s first virtual banks: ACM Holding Co (TrueMoney), backed by CP Group; Krungthai Bank in partnership with Advanced Info Service and PTT Oil and Retail Business Plc; and the SCB X consortium, which includes South Korea’s KakaoBank and China’s WeBank.
Ascend Money, a financial technology firm, is also backed by CP Group.
Speaking on behalf of TrueMoney and its Pay Next service, Mr Ithinan said credit limits are provided based on customers’ ability to repay and are restricted for usage within the TrueMoney ecosystem. If customers demonstrate responsible behaviour, their credit limits are gradually increased.
“Whether this contributes to household debt depends on perspective — some may see it as a convenient tool for well-managed finances, while others may view it as a risk for overspending, similar to credit cards,” said Mr Ithinan. “We monitor our non-performing loan ratio, which remains below 2%, compared with the industry average of 3-4%.”
