OJK Strengthens BNPL Regulations with POJK 32/2025

Enhanced Regulatory Framework for Digital Lending

The Financial Services Authority (OJK) has introduced new comprehensive regulations for the Buy Now Pay Later (BNPL) sector through POJK 32/2025. This regulatory update aims to provide legal certainty, strengthen governance and risk management, maintain financial sector stability, and promote healthy industry growth in line with digital transformation and national financial inclusion initiatives.

Key Provisions and Implications

The new regulations restrict BNPL operations to commercial banks and financing companies, creating a clearer distinction between BNPL services and online lending platforms. According to M. Ismail Riyadi, Head of the Financial Literacy, Inclusion, and Communication Department at OJK, this move is designed to enhance regulatory oversight and consumer protection.

Industry experts, such as Nailul Huda from the Digital Economy Center of Economic and Law Studies (Celios), welcome the clarification between BNPL and online lending. Huda notes that BNPL is essentially a product-based lending service rather than cash lending, similar to credit card services offered by banks but with a cardless and minimal face-to-face interaction approach.

Market Impact and Growth Statistics

The BNPL market has shown significant growth, with financing volumes reaching Rp10.85 trillion by October 2025, representing a 69.71% year-on-year increase. Despite this rapid growth, the gross non-performing financing (NPF) ratio remained relatively low at 2.79%.

Challenges and Future Directions

While industry experts appreciate the new regulations for bringing clarity to the BNPL sector, they also highlight potential challenges. Huda points out that while banks will likely adapt smoothly to the new rules, some BNPL operators from financing companies might face difficulties due to limited supporting data availability.

Moreover, Huda suggests that the regulations could be further strengthened by explicitly prohibiting cash withdrawal (gestun) practices, which are often associated with higher default rates. Although individual platforms may have their own restrictions, a clear regulatory ban could provide additional consumer protection.

Conclusion

The introduction of POJK 32/2025 represents a significant step towards creating a more structured and regulated BNPL market in Indonesia. By limiting BNPL services to licensed financial institutions and enhancing regulatory oversight, OJK aims to foster a more stable and sustainable digital lending environment while promoting financial inclusion and consumer protection.