POJK Number 32 of 2025 Tightens PayLater Business, OJK Authorization Now Required

Introduction

On 5 December 2025, the Financial Services Authority (“OJK”) issued Financial Services Authority Regulation Number 32 of 2025 on the Provision of Buy Now Pay Later (BNPL) Services (“POJK 32/2025”), which took effect on 15 December 2025. This regulation governs the provision of digital financing services in the form of Buy Now Pay Later (“BNPL”) or commonly “paylater” by Commercial Banks and Financing Companies. The regulation provides legal certainty, strengthens governance, and protects consumer interests amidst the rapid innovation of digital financing business models.

POJK 32/2025 establishes a reliable digital financing ecosystem and prevents risks arising from the growth of these services. The OJK considers that the operation of BNPL business models requires specific regulation to ensure conformity with prudential principles and adequate risk management. This is important because these services target the general public, including segments previously unserved by conventional financial institutions, thereby introducing new risks such as potential consumer default and information asymmetry. Through this regulation, the OJK aims to ensure that the financial services industry grows in a healthy and sustainable manner while maintaining financial system stability.

 

Key Provisions

Definitions and Authorized Providers

POJK 32/2025 defines BNPL as a financing facility provided by a financial services institution through an electronic system for the purchase of goods and/or services. Article 2 provides that only Commercial Banks and Financing Companies are authorized to carry out BNPL activities. Financing Companies seeking to conduct this business must obtain prior approval from the OJK. Commercial Banks shall implement these activities with reference to the prevailing laws and regulations applicable to banking.

Mandatory Characteristics of BNPL Services

Article 3 requires providers to satisfy certain characteristics when offering BNPL services. Providers must ensure that such financing is intended for the non-cash purchase of goods and/or services, is provided without collateral, and is subject to a specified limit (ceiling). In addition, the mechanism for repayment of principal and/or interest/margin must be executed in accordance with the agreed installment scheme. Credit approval processes must be conducted through an Electronic System, either by electronic face-to-face interaction (video call) or by non-face-to-face means.

Credit Assessment (Credit Scoring) and Risk Management

In relation to risk management, Commercial Banks and Financing Companies shall apply prudential principles, including in assessing creditworthiness. Under Article 6, providers are permitted to adopt special policies in assessing customer eligibility. The explanatory note to Article 6 clarifies that such special policies may allow providers to extend financing to prospective debtors whose non-performing loan balances recorded in the Financial Information Service System (“SLIK”) are not material, provided that those prospective debtors are assessed to retain the ability to repay.

Information Transparency and Severe Sanctions

Pursuant to Article 11, Commercial Banks and Financing Companies must provide information that requires attention to prospective customers on their Electronic Systems. Such information that requires attention shall include:

• the source of financing funds, particularly if a joint financing, channeling, or transfer to another party is involved; and 
• the amount and frequency of installments that the consumer must pay.

If a provider breaches this transparency obligation, the OJK may impose administrative sanctions, ranging from written warnings, suspension of business activities, to revocation of business authorization. Further, Article 11 (5) provides for an administrative fine of up to IDR 15,000,000,000.00 (fifteen billion rupiah) for violators.

Maximum Limit on Economic Benefits

Pursuant to Article 15, the OJK is authorized to determine the maximum limit on economic benefits (interest and other fees) for Financing Companies in providing BNPL, to protect consumers from excessive interest. The technical provisions regarding the determination of this limit shall be further stipulated by the OJK.

 

Transitional Provisions

Article 17 governs the legal status of financing agreements and operational arrangements entered into prior to the effective date of this regulation. BNPL financing agreements and cooperation agreements signed prior to the entry into force of POJK 32/2025 shall remain valid until such agreements expire. However, Commercial Banks and Financing Companies that operated BNPL services prior to 15 December 2025 are required to make adjustments to comply with the BNPL characteristics set forth in Article 3. Such adjustments must be completed within a maximum period of 6 (six) months from 15 December 2025.

 

Closing

POJK No. 32/2025 requires Financing Companies to obtain approval from the OJK, implement transparency in services delivered through electronic systems, and comply with the characteristics of BNPL within a period of six (6) months. Businesses operating paylater services are also required to ensure transparency of information provided to consumers and compliance with the limits on economic benefits to be stipulated. Compliance with these provisions is essential, as violations may result in administrative fines of up to IDR 15 billion and may lead to the revocation of business licenses.