OJK Introduces New Paylater Regulations Without Cash Advance Ban

Regulatory Framework for BNPL Services

The Financial Services Authority (OJK) has released new regulations (POJK 32/2025) governing the buy now pay later (BNPL) or paylater industry. While the regulations aim to strengthen the financial services sector, they notably do not include an explicit prohibition on cash advance (gestun) practices. OJK maintains that gestun doesn't meet the BNPL criteria as it lacks underlying transactions for goods or services.

Rationale Behind the Regulatory Approach

Agusman, OJK's Executive Head of Supervision for Financing Institutions, explained that gestun is not considered BNPL because it doesn't involve the purchase of goods or services. He emphasized that OJK will continue monitoring such practices as they pose potential risks. The regulator is focusing on enhancing risk management and ensuring compliance with existing regulations to maintain financial stability and consumer protection.

Industry and Expert Reactions

Economic experts have expressed concerns that the regulations leave a significant loophole by not explicitly banning gestun practices. Nailul Huda from Celios noted that while individual platforms may prohibit gestun, a clear regulatory ban is absent. The lack of explicit prohibition could potentially lead to continued high default rates associated with gestun practices.

Market Context and Growth Trends

The BNPL sector has shown significant growth, with banking BNPL credit reaching Rp26.20 trillion by November 2025, representing a 20.34% year-on-year growth. The number of accounts has surged to 31.47 million with a gross NPL of 2.04%. Financing companies have also seen substantial growth, with paylater financing reaching Rp11.24 trillion, a 68.61% year-on-year increase and a gross NPF of 2.78%.