Yahoo Finance Buy now, pay later providers will need to comply with updated code of conduct from Nov 1
The code of conduct was first launched a year ago to guide players and ensure that users do not take on too much debt.
Players who are offering buy now, pay later (BNPL) services will need to comply with an updated code of conduct from Nov 1 and be accredited by March 31, 2024, according to the BNPL working group. The announcement comes after Singapore-based BNPL startup Pace filed to voluntarily wind up its operations due to liabilities on Nov 8.
The BNPL code of conduct was first launched a year ago to guide players and ensure that users do not take on too much debt.
The group, which is formed by the Singapore FinTech Association (SFA) and industry players and under the guidance of the Monetary Authority of Singapore (MAS), says that players must meet and be engaged with two new standards.
First, a private credit bureau has been set up by global information technology services company Experian, to facilitate the credit information sharing process. The sharing of credit information will allow BNPL players to consider a customer’s outstanding balances across BNPL providers when conducting further credit assessments.
Next, BNPL players will be required to undergo an audit by an independent assessor to ensure that they are code compliant. Following this, the SFA will then assess their qualification for accreditation.
Only upon successful accreditation will BNPL players be allowed to display an accredited trustmark, which indicates compliance with the code for three years, before having to be re-accredited.
Six players — Ablr, Atome, Grab, LatitudePay, SeaMoney and ShopBack — have all appointed PwC as their independent assessor for their first assessment, according to the group’s release.
From April 1, 2024, customers may observe the trustmark on BNPL players websites and corresponding collaterals.
Finally, an oversight committee has been formed to supervise and monitor the code compliance. They include Adrian Ang from Allen & Gledhill LLP, Rose Tong of the Singapore Retailers Association, Rolf Haudenschild from Ingenia Consultants and Tan Huey Min from Credit Counselling Singapore.
“The industry has worked hard over the past year to implement the standards and safeguards in the BNPL Code, particularly to establish a credit information sharing process.” says Andrew Tan, executive director (Prudential Policy Department) of MAS. “We look forward to BNPL firms’ successful accreditation and earning the Trustmark by April 2024, which will help consumers recognise firms that have implemented the Code fully. The effective adoption of BNPL Code will improve consumer outcomes for BNPL users and mitigate risks of debt accumulation.”
In the first iteration of the BNPL code of conduct which came into effect on Nov 1, 2022, players had to adhere to five standards. Of which, BNPL providers could only offer their services only to customers who are at least 18 years old, and permit customers to accumulate no more than $2,000 in outstanding payments at any one time.
BNPL providers have also committed to make their fees and charges clear and transparent to customers, and ensure that advertisements of products and services comply with the Consumer Protection (Fair Trading) Act.
Shadab Taiyabi, President of SFA, says: “This has all been done with the protection of consumers in mind, to make sure those benefiting from using BNPL in Singapore can do so in a protected and trusted environment. This Code of Conduct is robust and now enforceable, we look forward to seeing the impending positive impact we know it will have on the industry."
See Also:
Click here to stay updated with the Latest Business & Investment News in Singapore
Singapore-based tech unicorn and Atome parent, Advance Intelligence Group, raises US$80 mil
Four trends that will define 2023 in the Apac payments space
Get in-depth insights from our expert contributors, and dive into financial and economic trends
