27 Apr 2026
From Rapid Growth to Institutional Maturity: A Look at OJK’s New Regulation on Buy Now Pay Later (BNPL)

1. Introduction 

   Over the past few years, the use of Buy Now Pay Later (“BNPL”) has transitioned from a niche fintech innovation to a cornerstone of Indonesia’s digital economy. As of January 2026, the Indonesian Financial Services Authority (Otoritas JasaKeuangan or “OJK”) recorded BNPL loans issued by banks reaching IDR 27.1 trillion (reflecting a 19.32 percent year-on-year increase) and BNPL financing provided by financing companies reached IDR 12.18 trillion (reflecting a 71.13 percent year-on-year increase).[1]

   Despite this rapid expansion, concerns have emerged regarding rising credit risk. Non‑Performing Financing (“NPF”) for BNPL offered by financing companies stands at 2.77 percent gross, while the Non‑Performing Loan (“NPL”) for BNPL products issued by banks is 2.14 percent gross.[2]

   In response to these dynamics, OJK has issued Regulation No. 32 of 2025 on the Implementation of BNPL (“OJK Reg. 32/2025”), which came into effect on 15 December 2025. Although BNPL has long been present in Indonesia, this regulation aims to support the development of a reliable digital financing ecosystem and institutionalize it by strengthening legal certainty, governance, and consumer protection. It also seeks to mitigate risks such as potential defaults, information imbalance, and operational or systemic risks arising from the increased use of digital technology.[3] 

2. Key Regulatory Pillars under OJK Reg. 32/2025
    

   1. Definitional Scope and Characteristics of BNPL 

      Under OJK Reg. 32/2025, BNPL is defined as a financing facility provided by financial services institutions, namely commercial banks and financing companies (“BNPL Providers”), through electronic systems for the purchase of goods and/or services. BNPL must meet six key characteristics, namely: 

      1. intended for the financing of goods and/or services on a non‑cash basis for consumers;

      2. provided without collateral (on an unsecured basis);

      3. subject to a specific credit ceiling;

      4. repayment of principal and/or interest, margin, return, or ujrah is made in accordance with an agreed instalment scheme;

      5. consumer approval conducted through face‑to‑face electronic meetings or non‑face‑to‑face electronic channels; and 

      6. provided through an electronic system.

   2. Required Permits 

      BNPL services may only be offered by commercial banks and financing companies, under either conventional or sharia principles. However, the approval requirements differ between the two. Financing companies must obtain prior approval from OJK before offering BNPL services, in addition to maintaining their core business licenses. Banks, on the other hand, may deploy BNPL products by adhering to existing digital banking and product implementation regulations, without requiring an additional standalone BNPL permit.

   3. Cooperation with Third Parties 

      BNPL Providers may cooperate with other parties, such as e‑commerce platforms, under a cooperation agreement. A critical mandate under OJK Reg. 32/2025 is transparency: the identity of the actual financing provider must be explicitly disclosed to the consumer at the point of transaction to prevent brand confusion.

   4. Consumer Protection and Information Disclosure Obligations 

      OJK Reg. 32/2025 emphasizes the importance of consumer protection by requiring BNPL Providers to carry out clear information disclosure obligations and comply with personal data protection requirements.

      BNPL Providers must disclose at least the following information to consumers:

      1. the source of funds used for the BNPL facility, including whether the financing involves joint financing, channeling, or any transfer or assignment to another party;
      2. the amount and frequency of instalments; and
      3. any other information required by OJK.
          

      If a BNPL Provider fails to meet these disclosure obligations, non-compliance may trigger a severe ladder of sanctions, including:

      1. written reprimands;
      2. restrictions on products, services, or business activities (in part or in full);
      3. suspension of products, services, or business activities (in part or in full);
      4. dismissal of management;
      5. administrative fines of up to IDR 15,000,000,000 (fifteen billion rupiah);
      6. revocation of product or service approvals; and
      7. revocation of the business license.
          

   5. Consumer Feasibility Assessment 

      BNPL Providers may establish their own internal criteria for assessing consumer eligibility. As of March 2026, OJK has yet to issue detailed consumer‑eligibility standards, and the assessment therefore remains at the discretion of each BNPL Provider.

      However, it is anticipated that OJK will issue implementing rules under the Draft Regulation of the Board of Commissioners (Rancangan Peraturan Anggota Dewan Komisaris or “RPADK”), which is expected to standardize eligibility, to ensure BNPL users have adequate financial capacity. Current market practice and draft discussions suggest a move toward minimum age requirements of 18 years (or married) and a minimum income threshold of IDR 3 million to mitigate NPF and NPL risks and curb rising delinquency rates.[4]

   6. OJK Supervisory Authority 

      OJK has the authority to terminate BNPL operations if a provider is found to be violating applicable laws and regulations, exhibiting unmitigated risk profiles or failing to resolve consumer grievances. OJK may also impose maximum economic exposure limits for financing companies and based on certain considerations, issue policies that diverge from those set out in OJK Reg. 32/2025.

   7. Transitional Provisions 

      BNPL Providers that were already offering BNPL services before the issuance of OJK Reg. 32/2025 are granted a six-month grace period, ending on  15 June 2026, to adjust their services to achieve full compliance. Existing BNPL financing agreements and cooperation agreements entered into before 15 December 2025 will remain valid; however, any subsequent amendments must strictly align with the new regulatory standards.

3. ABNR Commentary

   The issuance of OJK Reg. 32/2025 marks an important step in strengthening and providing clearer legal certainty for consumer protection in the implementation of BNPL. The regulation also clarifies which entities are permitted to provide BNPL services.

   In its earlier days, BNPL products began to emerge in Indonesia before OJK introduced a dedicated BNPL regulatory framework. In that pre‑OJK Reg. 32/2025 period, BNPL was not regulated as a standalone product category under a dedicated OJK regulation; as a result, market participants structured BNPL offerings by reference to existing sectoral regimes, most prominently the financing company framework, including through white‑label partnerships and channelling models. 

   OJK Reg. 32/2025 now expressly establishes the categories of entities permitted to provide BNPL services, limiting such activities to licensed commercial banks and financing companies, with the latter required to obtain prior approval from OJK. Consequently, structures that effectively position non-authorized entities as BNPL providers are no longer consistent with the current regulatory framework.
   The transparency architecture under OJK Reg. 32/2025 is intended to ensure that consumers receive clear disclosure of the identity of the BNPL provider and, where relevant, the source of funding.

   These disclosure requirements are also directly relevant to the securitization of BNPL receivables, which in Indonesia has increasingly been structured through asset‑backed securities issued under the collective investment contract scheme (Kontrak Investasi Kolektif Efek Beragun Aset or KIK-EBA). Where BNPL receivables are transferred in connection with a securitization, OJK Reg. 32/2025, which requires disclosure if the financing has been transferred to another party, becomes a key structuring and compliance touchpoint and may be leveraged to support perfection considerations under Article 613 of the Indonesian Civil Code.

   Separately, in connection with the forthcoming the RPADK, we will continue to monitor any implementing guidance and provide actionable updates as further clarity emerges.

   TL;DR:

This article was written by partners Chandrawati Dewi (cdewi@abnrlaw.com), Monic Devina (mdevina@abnrlaw.com), Meitiara Bakrie (dbakrie@abnrlaw.com), and trainee associate Jesslyn Widjaja (jwidjaja@abnrlaw.com)

This ABNR News and its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.