Thailand Central Bank Delays Buy Now, Pay Later Licenses Amid Debt Concerns

Licensing Freeze Takes Hold

The Bank of Thailand is holding back approval of digital personal loan licenses that cover buy now, pay later services while it drafts new regulations for the sector. Several business operators, including e-commerce platforms, have already applied for the licenses but face an extended wait as the central bank addresses concerns over household debt levels.

Commercial banking sources indicate the regulator is particularly focused on BNPL services offered by e-commerce platforms, where lending standards and debt collection practices often fall short of those imposed on regulated financial institutions.

Standards Gap Drives Regulatory Push

Current requirements for BNPL lending services provided by e-commerce platforms are less stringent than those applied to lenders under central bank supervision. The disparity shows up most clearly in credit approval and debt collection practices.

Credit approval standards vary widely among BNPL service providers. Some platforms allow customers to apply for and receive a credit line even without any previous purchase or transaction history on the platform. Others refuse BNPL loan applications from customers who have previously bought goods or services through the platform.

According to the Bank of Thailand's financial literacy materials, the stringency of credit approval differs significantly across providers. This inconsistency has raised flags about consumer protection and systemic risk.

Two Regulatory Tracks, Different Rules

The central bank currently sets a maximum credit line of 20,000 baht for BNPL services under its supervision, with a ceiling interest rate of 25 percent per year and a loan period no longer than six months.

BNPL providers not regulated by the central bank typically offer credit lines exceeding 20,000 baht. They generally provide the service under the Civil and Commercial Code and are allowed to charge interest rates up to 15 percent per year. Repayment periods vary depending on the provider.

For unregulated BNPL providers, interest income is not the primary revenue source. Their core income derives from gross profit charged to merchants, which ranges from 22 to 30 percent, nearly double the 15 percent interchange rate. With this business model, e-commerce platforms may secure relatively high income from GP and place less emphasis on credit quality and debt collection, potentially creating moral hazard and undermining financial discipline among consumers.

What's Coming in November

The regulator is considering several measures for the new framework. These include setting minimum age requirements for users, determining eligible product categories, and imposing interest rate caps.

Virati Ratanakorn, governor of the central bank, said recently the institution was drafting regulations for BNPL services following rapid expansion of the sector, particularly among lower-income consumers and younger people. The new regulations are expected to take effect in October or November this year.

Market Implications

The licensing pause reflects broader anxiety about Thailand's household debt burden. The central bank's move signals a shift toward tighter oversight of alternative lending channels that have flourished outside traditional banking regulation.

E-commerce platforms that have built BNPL into their checkout flows now face uncertainty about when and under what conditions they can formalize their operations. The gap between current platform practices and anticipated regulatory requirements suggests some providers will need to overhaul credit assessment, loan limits, and fee structures to gain approval.

For consumers already using BNPL services through unregulated platforms, the regulatory transition may bring both protections and constraints. Stricter credit standards could limit access for some borrowers, while interest rate caps and loan term limits may reduce the cost of credit for others.