Welcoming a New Chapter for BNPL Growth in Indonesia

Note: This article reflects the personal opinion of the writer and does not represent the views of the CNBC Indonesia editorial team.

From various perspectives, regulation is sometimes positioned as a factor that limits the space for growth. However, in Indonesia’s financial services sector, the reality appears to be quite the opposite. Strengthening the regulatory framework has in fact acted as a catalyst in building a healthier foundation for industry growth.

In the context of Buy Now Pay Later (BNPL), this is clearly evident. The Financial Services Authority (OJK) has issued a formal regulatory framework through POJK No. 32 of 2025, which provides clearer definitions and boundaries for BNPL services in Indonesia.

Under this rule, BNPL provision may only be carried out by institutions under direct supervision, namely banks and financing companies. The regulation also sets standards for governance, risk management, and more structured reporting obligations for service providers.

Beyond mere formal recognition, this policy forms part of efforts to ensure that access to financing remains inclusive yet responsible. This is reflected in the strengthening of provisions that encourage better governance, risk management, and consumer protection in the delivery of BNPL services.

In line with the implementation of this regulation, the OJK has also granted an adjustment period for certain provisions. This approach gives industry players the opportunity to ensure implementation aligns with the regulator’s requirements, while reinforcing the foundations of a healthier, more credible, and sustainable BNPL ecosystem within the national financial system.

This increasingly clear policy direction has fostered the formation of a more accountable ecosystem. The impact is beginning to show, both in improved underwriting and risk management standards, and in strengthened trust from consumers, banking partners, and institutional investors.

In this context, regulation clearly does not restrict growth. Rather, its presence ensures that such growth is built upon a healthy foundation.

This approach also marks an important shift in the industry landscape. Innovation no longer moves beyond oversight, but develops within an increasingly directed framework. BNPL has now become part of formal financial services, with an ever-clearer position within the national financial system.

With a maturing regulatory foundation, attention now turns to the significant growth opportunities that lie ahead for the industry. Indonesia is one of the most attractive digital financing markets, supported by a large underserved population — around one in three people remain untouched by formal banking services — as well as accelerating digital adoption across various sectors.

This potential is reflected in the industry’s development. The OJK recorded that outstanding BNPL financing by financing companies has reached Rp12.8 trillion, an increase of nearly 56% year on year. This figure shows that BNPL is no longer at an early adoption stage, but has developed into one of the financing alternatives increasingly accepted by the Indonesian public.

Behind this growth lies a demographic force that is one of the main drivers of the BNPL industry’s development in Indonesia. With a dominant productive-age population — including Generation Z and Millennials, who make up half of the total population — Indonesia has a base of people familiar with digital services in all aspects of life. For these generations, speed and ease of access are no longer merely added value, but basic expectations in accessing services, including financial services.

These characteristics are also reflected in the user base of PT Akulaku Finance Indonesia. Around 60% of users fall within the 18 to 29 age bracket. This demonstrates that BNPL has also grown because of its ability to meet the needs of the digital generation.

Similar progress is reflected in the performance of PT Akulaku Finance Indonesia. Amid various global challenges and uncertainties, the company has consistently recorded double-digit growth. New financing disbursed by the company grew 23% to Rp7.44 trillion throughout 2025.

This achievement shows that demand for prudently managed digital financing remains strong, even as the public and businesses face dynamic macroeconomic conditions.

Interestingly, the majority of transactions facilitated by the company are dominated by the fulfilment of essential needs. Electronics that support productivity, household needs, and various everyday requirements are the main contributors to the company’s financing portfolio.

This shows that BNPL is increasingly being used as an instrument to help people manage household cash flow whilst meeting needs relevant to everyday economic activity.

As such, the use of BNPL is no longer seen merely as a means of consumption, but also as a financing solution that supports productivity and the continuity of people’s economic activities.

The rapid growth of BNPL is simultaneously ushering the industry into a new phase of development. Alongside an effective regulatory framework, growth must be accompanied by stronger governance, higher risk management standards, and adequate consumer protection. In this way, the industry will not only grow larger, but also develop in a healthier and more sustainable manner.

Experience in various countries shows that BNPL growth has been accompanied by increased attention to consumer protection, the potential for over-indebtedness, and the need for a mature regulatory framework.

Building a More Responsible Ecosystem

As BNPL adoption widens in everyday needs, the responsibilities of service providers have also increased significantly.

Reaching first-time borrowers, most of whom have no formal credit history, is not simply a matter of providing access to financing. It requires the ability to assess risk accurately, understand payment behaviour, and manage portfolios sustainably.

This is where the synergy between regulation and technological innovation becomes crucial. Connectivity with the national credit information system, along with the use of alternative data and Artificial Intelligence-based analytics models, enables more precise decision-making.

At the same time, the regulatory framework ensures that such innovation operates within clear boundaries, whilst continuing to prioritise consumer protection. This combination forms the foundation of an ecosystem that is not only inclusive, but also responsible.

A Positive Signal for Stakeholders

For investors and global partners, the development of BNPL in Indonesia reflects an increasingly progressive dynamic. It shows that a market with high growth potential need not sacrifice governance or stability. On the contrary, Indonesia demonstrates that innovation and regulatory discipline can go hand in hand in building long-term value.

In a global landscape that increasingly emphasises the quality of growth, institutional strength, and risk management, this development signals that Indonesia is not only large in terms of market size, but is also becoming increasingly credible as a financial ecosystem.

Going forward, the direction of BNPL development in Indonesia will increasingly be determined by the quality of growth it delivers.

As the regulatory framework continues to evolve and industry practices mature, the focus will shift towards how these services are managed responsibly — in terms of consumer protection, risk discipline, and the sustainability of the businesses involved.

This new chapter demands that industry players not only move quickly, but also with prudence. Ultimately, the future of BNPL will not be determined by how fast the industry grows, but by how strong a foundation of trust it is able to build.