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OJK Introduces Regulatory Framework for Buy Now Pay Later (BNPL) Services

Updated: 8 hours ago

Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan or OJK) has introduced a dedicated regulatory framework regulating Buy Now Pay Later (“BNPL”) services through:


  • OJK Regulation No. 32 of 2025 on Buy Now Pay Later Financing Activities by Financing Companies (“POJK 32/2025”), effective since 15 December 2025; and

  • Regulation of Members of the OJK Board of Commissioners Number 2 of 2026 (“PADK 2/2026”), effective since 4 May 2026.


The issuance of these regulations marks a shift from the previous regime, under which BNPL activities were regulated solely under the general financing framework. With both regulations now in force, the OJK has commenced implementing and enforcing a dedicated BNPL regulatory regime.


BNPL services may only be offered by licensed:

  • Commercial Banks; and

  • Financing Companies.


Commercial Banks must conduct BNPL activities in accordance with the prevailing banking regulations.


For Financing Companies, BNPL operations require prior OJK approval. PADK 2/2026 also sets out the administrative requirements and approval procedures that must be satisfied before a Financing Company may offer BNPL products.


Under POJK 32/2025, BNPL financing offered by Financing Companies must possess the following characteristics:


  • financing for the purchase of goods and/or services through non-cash transactions;

  • unsecured financing;

  • predetermined financing limits;

  • repayment of principal and financing charges in accordance with an agreed installment schedule;

  • customer approval conducted electronically, whether via electronic face-to-face interaction or non-face-to-face mechanisms; and

  • implementation through an electronic system.


Financing Companies were given a six-month transition period to match their products with these requirements. As of 16 June 2026, these provisions are fully enforceable.


In addition, POJK 2/2026 requires Financing Companies to ensure that BNPL facilities:

  • are not used for unlawful transactions;

  • do not impose compound interest or interest-on-interest; and

  • do not charge additional fees for early repayment.


Prior to extending BNPL financing, Financing Companies must conduct due diligence, including:

  • verification of supporting documents;

  • electronic or direct confirmation of debtor information;

  • data processing and scoring using relevant third-party data, where necessary; and

  • assessment of debtor eligibility.


At a minimum, debtor eligibility must satisfy the following criteria:

  • the debtor must be at least 18 years old or legally married; and

  • the debtor must earn a minimum gross monthly income of IDR 3 million, supported by appropriate evidence such as salary slips, bank statements, or other acceptable income verification methods.


Financing Companies must assess a debtor’s repayment capacity by comparing total BNPL obligations against the debtor’s income. The maximum permitted ratio is:

  • 40% of income during 2027–2028; and

  • 30% of income from 2029 onwards.


For this purpose, BNPL obligations include not only principal repayments but also interest, penalties, and other charges payable by the debtor which constitutes “economic benefit” as per PADK 2/2026.


The BNPL regulatory framework reflects OJK’s focus on consumer protection, responsible lending, and risk management within Indonesia’s rapidly growing digital financing sector.


Financing Companies currently offering, or intending to offer, BNPL products should ensure that:


  • the necessary OJK approvals have been obtained;

  • BNPL products comply with the mandatory characteristics prescribed by POJK 32/2025;

  • debtor onboarding and verification procedures satisfy the new assessment requirements;

  • income verification and affordability testing mechanisms are implemented; and

  • internal policies and systems are updated to meet the upcoming compliance deadlines.


Failure to comply may result in supervisory measures by OJK, including corrective actions, administrative sanctions, monetary penalties, restrictions on business activities, and, in serious cases, revocation of business licenses.


The introduction of POJK 32/2025 and POJK 2/2026 establishes a regulatory framework governing BNPL financing in Indonesia. With key compliance deadlines already taking effect and debtor eligibility requirements becoming mandatory from 1 July 2026, Financing Companies should promptly review their BNPL operations, ensure full regulatory compliance, and mitigate enforcement risks.


For further information, please contact:


Raden Aji Wibisono

Partner


Adistra Kusuma Waligalit

Associate

 
 
 

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