The Singapore Fintech Association (SFA) has accredited four “buy now, pay later” (BNPL) service providers based on the guidelines outlined in its code of conduct promoting responsible lending practices and consumer protection.
From May 1, the four companies – Abnk, Atome, Grab, and SeaMoney – will be able to display the association’s Trustmark on their websites and other channels to signify that they have demonstrated their commitment to meeting the guidelines.
Consumers and merchants using BNPL services are encouraged to engage only with accredited BNPL service providers to ensure that their interests are safeguarded, the SFA says.
“The accreditation of the four BNPL service providers with an accredited Trustmark marks a significant milestone for the BNPL sector,” says SFA president Shadab Taiyabi. “Relying on an industry-led Code highlights the growing maturity of the fintech sector and I am pleased that all four BNPL service providers have taken proactive steps to ensure they implement robust safeguards that protect both consumers and merchants.
All four BNPL service providers had submitted their applications for the Trustmark by the application deadline of March 31 2024. Following an independent assessment by accounting major PwC and a thorough evaluation by the SFA, the applications were approved and the accredited Trustmark was awarded.
Best practices
Launched in October 2022, the BNPL Code of Conduct promotes industry best practices by stipulating safeguards to mitigate the risk of consumer over-indebtedness. These best practices include:
- Creditworthiness safeguards. Each BNPL service provider will permit customers to accumulate no more than S$2,000 (US$1,470) in outstanding payments at any given time, unless they complete an additional credit assessment.
- Fair, transparent fees and clear disclosures. BNPL service providers will cap all fees, including late fees and other charges. All fees and fee-related structures will also be communicated in a manner that is clear and transparent to customers.
- Ethical marketing practices. BNPL service providers will ensure that advertisements of products and services comply with the relevant advertising codes. BNPL providers’ advertising and promotional materials will be clear and not misleading or deceptive.
- Accommodation for voluntary exceptions. BNPL service providers will allow consumers to voluntarily exclude themselves from BNPL services and promotional materials once this has been communicated via writing. Providers will retain a list of the customers who have voluntarily excluded themselves from their services.
- Financial hardship assistance. BNPL providers will consider extending hardship assistance to consumers facing financial hardships to work out a mutually acceptable payment arrangement with them. During this time, BNPL providers will not allow any further transactions. BNPL providers commit not to initiate bankruptcy proceedings against their customers.
“The Trustmark will help consumers make informed decisions when choosing BNPL service providers,” says Loo Siew Yee, assistant managing director (policy, payments and financial crime), at the Monetary Authority of Singapore. “MAS will continue to work with the industry to ensure that the BNPL Code of Conduct remains effective in upholding users’ interests.”
