Jakarta. Buy now, pay later (BNPL) services are increasingly becoming a preferred payment option for Indonesian consumers, offering flexible installment payments without disrupting cash flow, according to data from the Financial Services Authority (OJK).

Outstanding BNPL balances reached Rp 37.44 trillion ($2.2 billion) as of November 2025, comprising Rp 26.2 trillion from banking-based pay later services and Rp 11.24 trillion from the multifinance industry, OJK data showed.

Dian Ediana Rae, OJK’s chief executive for banking supervision, said outstanding BNPL loans in the banking sector grew 20.34% year on year in November, slightly slower than the 21.03% growth recorded a month earlier.

The number of banking-based BNPL accounts rose to 31.47 million in November, up from 30.99 million in October. The non-performing loan ratio for BNPL remained low at 2.04%, improving from 2.5% in the previous month.

“Banking-based BNPL loans still account for only 0.32% of total bank lending, but they continue to record strong annual growth,” Dian said earlier this week.

The rapid expansion of BNPL reflects growing consumer reliance on installment-based payment solutions that do not require credit cards, particularly as purchasing power remains under pressure. The ease of access and seamless integration into digital transactions have made pay-later products a popular alternative for everyday spending.

Growth in the multifinance sector has been even stronger. Outstanding BNPL financing in the segment expanded by 68.61% year-over-year in November, following a 69.71% growth in October.

However, rising dependence on BNPL services also presents challenges. The OJK has stressed the importance of prudent credit assessment by financial institutions, particularly in evaluating customers’ repayment capacity. The regulator said it is strengthening supervision to ensure BNPL growth remains sustainable and aligned with consumer protection principles.

To address emerging risks, the OJK has issued Regulation No. 32/2025 on the implementation of buy now, pay later services, which applies to both commercial banks and multifinance companies. The regulation is designed to mitigate risks such as potential defaults, information asymmetry, and operational or systemic risks arising from digital financing platforms.

Under Article 11 of the regulation, BNPL providers are required to clearly disclose key information to prospective customers, including funding sources, installment amounts, and repayment frequency.

Institutions found to be in violation may face administrative sanctions ranging from written warnings and product restrictions to partial or full suspension of business activities. More severe penalties include product freezes, removal of management, fines of up to Rp 15 billion, revocation of product licenses, and withdrawal of business permits.

The OJK said the regulatory framework aims to ensure BNPL services are delivered under sound governance, prudent risk management, and strong consumer protection, as digital financial innovation continues to expand access to credit for previously underserved segments of the population.