Indonesia's Financial Services Authority issues a regulatory framework for Buy Now Pay Later services

Indonesia's Financial Services Authority (Otoritas Jasa Keuangan, OJK) issued Regulation No. 32 of 2025 establishing a dedicated framework for the operation of Buy Now Pay Later (BNPL) services, aimed at mitigating risks from the rapid growth of digital financing. The rules restrict BNPL provision to Commercial Banks and Finance Companies and set requirements covering governance, risk management, consumer protection and market conduct. BNPL may be offered on a conventional basis or in line with Sharia principles. Commercial Banks may provide BNPL by referring to the applicable banking regulatory framework, while Finance Companies must obtain OJK approval before launching BNPL services. The regulation defines BNPL as unsecured, non-cash financing for the purchase of goods and/or services, subject to a credit limit, delivered through electronic systems with agreed instalment payments; providers must apply prudential principles and comply with customer/debtor personal data protection rules. It also introduces clear disclosure obligations to prospective and existing customers, including information on the source of financing funds and the amount and frequency of instalments, alongside OJK-specified disclosures. The framework includes rules on collections, reporting to OJK, and termination of BNPL operations, whether initiated by the provider or ordered by OJK. OJK is also empowered to set specific policies, including a maximum limit on the economic benefit that Finance Companies may earn from BNPL, taking into account the public interest, financial system stability and fair competition. The regulation has been in force since 15 December 2025.