Buy now, pay later will only allow each customer to accumulate a maximum of $2,000 in outstanding balances unless the customer can complete an additional credit assessment.

This is one of the criteria for an industry conduct guide by the Buy Now Pay Later Working Group. Guidance was developed to protect consumers from becoming overly indebted and to raise the bar for the industry.

The transaction limit currently set for customers is determined according to the customer's repayment method and repayment record, and some can be as high as several thousand yuan. The transaction limit for new customers is generally lower.

The newly established 2,000 SGD ceiling is equivalent to the credit limit of each customer on individual buy-before-pay platforms, but it can be adjusted based on an income assessment.

Under the guidance of the Monetary Authority of Singapore, the Singapore FinTech Association (Singapore FinTech Association) set up a buy now, pay later working group with local players in March this year, and released the industry conduct guidelines on Thursday (October 20). The guide is endorsed by local owners.

The buy now, pay later service has emerged in Europe and the United States many years ago, and it began to emerge locally last year. When consumers shop online or in physical stores, they can choose to repay in installments without interest.

In the local area, it is more common to pay one-third of the payment when shopping, and the rest is paid off in two months. Typically buy now pay later operators take a commission from retail transactions.

Compared with the previous installment shopping, the buy now pay later service not only includes large-value products such as furniture and electrical appliances but also includes a wider range and lower amount of products and services. Such as clothes, bags, shoes, cosmetics, dining, fitness and travel, etc.

The service, which has been popular with young consumers since its launch, has also drawn the attention of regulators, concerned about overspending and indebtedness.

In addition to transaction caps, the Code of Conduct also requires buy-now-pay-later operators to cap various fees, including late fees. All fees and interest cannot be compounded.

Operators will also consider assisting consumers facing financial hardship, such as waiving all or part of the charges or delaying charges and developing mutually acceptable payment arrangements. During this period, the operators did not allow consumers to use service transactions, and the operators also promised not to initiate bankruptcy proceedings for customers.

Shadab Taiyabi, president of the FinTech Association, pointed out that the buy now pays later indupaysy has great growth potential. The Code of Conduct can set the standard for existing and future local players, increasing trust and transparency.

The head of Grab Finance Singapore said the set of guidelines showed that the industry was maturing, and it was hoped that it would speed up the progress of financial inclusion.