Are Buy Now Pay Later services in Singapore a trap? What you need to know

We all know the ‘I want it now’ vibe is real, and Buy Now Pay Later (BNBL) is just BNPLing its way to the top in Singapore. You’ve probably seen those tempting little buttons on checkout pages offering you the choice to split your purchase into smaller instalments, sometimes even with zero interest. If you are tech-savvy, digital-first, and always looking for convenience, BNPL can feel like the perfect financial hack. But is it actually a smart way to shop or a cleverly disguised debt trap?

What is Buy Now Pay Later or BNPL?

BNPL is a payment option that allows you to make a purchase immediately and pay for it later, usually in interest-free instalments over a short period, typically three to six months. It’s positioned as an alternative to credit cards, offering the allure of zero interest, no annual fees, and fewer barriers to entry.

What are the biggest Buy Now Pay Later service providers in Singapore?

In Singapore, Buy Now Pay Later services like Atome and Grab PayLater have gained traction quickly, especially among younger consumers. Flourishing in our vibrant e-commerce ecosystem, these services tend to partner with popular fashion, tech, and beauty brands, making it incredibly easy to defer payments on everything from your Chanel handbag to your Grab ride.

What is the difference between Buy Now, Pay Later (BNPL) and credit card installments?

What makes BNPL appealing is its ease of access. You don’t need a credit score or hit a minimum income to sign up. Just a smartphone, a bank account, and some basic personal details. But BNPL and credit cards share a lot more in common than you might think. Both allow you to delay full payment, and can accumulate late fees or even damage your credit profile if abused. 

The main difference is perception: Credit cards are often associated with financial responsibility, while BNPL is marketed as a lifestyle tool, usually light, casual, and consequence-free. But the truth is, if you default on your BNPL payments, you may face hefty late fees, account suspensions, or be referred to debt collectors.

Unlike credit cards, BNPL services are not currently regulated under the Monetary Authority of Singapore’s (MAS) Credit Card and Charge Card Framework. However, MAS and the BNPL industry have rolled out a code of conduct to curb irresponsible lending, such as implementing spending caps. Still, these protections aren’t foolproof, and the system largely relies on user discipline.

Is it good to buy now, pay later?

BNPL isn’t inherently bad. In fact, when used wisely, it can be a helpful financial tool, especially if you’re managing short-term cash flow or making a large purchase during a sale. But like any credit facility, the key lies in self-awareness and control.

How to Use Buy Now Pay Later Safely & Effectively

If you’re going to use BNPL, here’s how to do it right:

• Only buy what you can already afford in full. BNPL should be a cashflow strategy, not an excuse to live beyond your means
• Keep track of your instalments. With multiple purchases across different platforms, it’s easy to lose sight of when payments are due. Set calendar reminders or use apps to manage them
• Avoid stacking BNPL payments. Just because the payments are small doesn’t mean they won’t add up. Multiple BNPL commitments can quietly snowball into a big monthly burden
• Don’t rely on it for essentials. If you find yourself using BNPL for groceries or bills, that’s a red flag. It could mean you’re stretching beyond your budget

The Cons of Making Buy Now Pay Later Payments

It can become one if you’re not careful. BNPL services are designed to make spending easier, not necessarily smarter. The danger lies not in the tool itself, but in how it’s used. For those who are still building financial independence and habits, it’s essential to view BNPL through the same lens as any credit product. They are convenient, but not without consequences.

As financial consultant Kelvin Ang puts it, “Many people might fall into the trap as [BNPL] sounds affordable psychologically. But if we were to accumulate the instalment from various purchases, many end up struggling to pay off the accumulated monthly instalment, and we end up spending more than what we can afford!”

BNPL is here to stay. The real question is: Can we learn to use it responsibly before it uses us?