Credit reference agency Experian is supporting Singapore’s Buy Now, Pay Later (BNPL) Working Group with creditworthiness checks for consumers.
BNPL solutions available to Singapore consumers have increased in recent years, as well as wider merchant adoption. But concerns about the negative impact to consumer credit scores has prevented many BNPL providers from reporting information.
The BNPL Working Group was set up by the Singapore FinTech Association (SFA) under the guidance of the Monetary Authority of Singapore (MAS).
Accredited BNPL players will share users’ credit information for creditworthiness checks by Experian. This information includes outstanding BNPL balances, missed payments as well as delinquencies.
The information will coincide with the Group’s BNPL Code of Conduct. The Code sets out guidance for BNPL service providers to protect consumers as well as ensure that BNPL offerings benefit the ecosystem. Advocates can display an accredited trustmark.
It aims to crystallise best practices including:
- Creditworthiness safeguards
- Fair, transparent fees, and clear disclosures
- Ethical marketing practices
- Accommodation for voluntary exceptions
- Financial hardship assistance
Need for checks
“To succeed in our mandate, we recognise the importance of working with different facets of the industry,” said Shadab Taiyabi, SFA president. “We’re delighted to partner with Experian to facilitate creditworthiness checks for consumers and ensure interests continue to be prioritised.”
“We’ve been operating BNPL bureaus in the US and the UK and this would be the first step in bringing our global expertise into the region,” added Maria Liu, managing director, Experian Greater China and SEA.
While Kabir Khanna, general manager, Experian Credit Services Singapore, said: “We are looking forward to working closely with SFA to tackle the issue of credit stacking among BNPL users.”
Moving forward, Experian also looks to roll out a series of knowledge sharing engagements for all accredited BNPL players in Singapore. This aims to bring global best practices from Experian’s BNPL bureau in the US as well as the UK to the region.
Launched earlier this year, Experian’s bureau provides real-time reporting of consumers’ BNPL activity. BNPL payments are expected to grow by 44.2 per cent on an annual basis to reach $614.6billion in 2022.