The Bank of Thailand has announced a strategic initiative to bring the rapidly expanding “Buy Now, Pay Later” (BNPL) sector under formal banking supervision in response to emerging systemic risk concerns.

The central bank’s leadership, led by Governor Vitai Rattanakorn, emphasised that the present regulatory framework does not classify BNPL transactions as loans, allowing a growing volume of “invisible” consumer credit to remain outside the oversight of financial authorities.

This loophole, officials warn, obscures true household debt levels from official records and could amplify financial vulnerabilities if left unaddressed.

In a formal statement, the Bank of Thailand outlined its objective to integrate BNPL providers into the national regulatory structure so that their lending activities are subject to risk controls and reporting requirements similar to those applied to traditional banks.

Under the current system, BNPL transactions conducted through popular e-commerce platforms escape classification as loans and are not reported to the National Credit Bureau, limiting policymakers’ ability to assess cumulative credit exposures across the economy.

Governor Vitai highlighted the pace at which BNPL usage has grown, noting its strong appeal among young professionals and first-time borrowers attracted by the ease of instant credit.

While acknowledging the sector’s contribution to Thailand’s digital economy, he stressed that unchecked growth carries potential risks to financial stability and could contribute to over-leverage among certain consumer segments.

Bringing BNPL services into the regulatory fold is intended to standardise risk assessment, enhance transparency, and ensure that providers adopt prudent credit management practices.

Major BNPL operators in Thailand, including services linked with leading e-commerce platforms, have responded by asserting their own commitment to responsible lending and robust risk controls.

Industry representatives noted the use of advanced data analytics and behavioural scoring to set credit limits and mitigate default risk.

However, the Bank of Thailand maintained that durable oversight will require enhanced collaboration between regulatory agencies to adapt existing frameworks for a rapidly evolving digital credit environment.

The central bank acknowledged that implementing comprehensive regulatory changes will require time and cooperation among state institutions.

Officials indicated that steps to align BNPL activity with national credit reporting and supervision mechanisms are underway, reflecting Thailand’s broader efforts to strengthen financial sector resilience as digital financial services continue to expand.

The move underscores Thailand’s proactive stance on financial innovation and its determination to balance growth with stability, positioning the country’s financial system to adapt to new credit products while safeguarding consumers and the broader economy.