<\/p>\n
Instalment plans used to fund everything from bubble tea to chicken rice have caught the attention of Thailand\u2019s central bank chief.<\/p>\n
Governor Vitai Ratanakorn is moving to curb the rapid growth of buy-now-pay-later services, which increasingly allow consumers to split everyday purchases into instalments. He worries that easy access to digital credit is encouraging borrowing in a country already burdened by one of Asia\u2019s highest household debt levels.<\/p>\n
\u201cThere are some things that simply shouldn\u2019t be bought on credit, whether it\u2019s a 106-baht ($3) bubble tea or a 50-baht plate of chicken rice,\u201d Vitai told reporters at a recent press event in Bangkok. \u201cWe may have gone too far \u2013 when people start financing small purchases, it creates a habit of spending money they don\u2019t have.\u201d<\/p>\n
Vitai Ratanakorn. Image: Valeria Mongelli\/Bloomberg<\/p>\n
Thai household debt is equivalent to about 87% of gross domestic product, high relative to the rest of the region and unusually exposed to consumer spending rather than housing, which can act as a store of value. That leaves people with little buffer against economic shocks and makes debt one of Thailand\u2019s biggest economic vulnerabilities.<\/p>\n
For years, the debt overhang has weighed on consumption and complicated efforts to revive growth, and the fear is that the rapid spread of buy-now-pay-later services could deepen an already entrenched problem. Vitai estimates the number of BNPL accounts climbed to about 6 million last year, nearly tenfold from 2021.<\/p>\n
The boom has been fueled by Thailand\u2019s rapid adoption of e-commerce and digital payments. Consumers shopping online or paying through mobile apps can choose a pay-later option at checkout and convert purchases into instalments with just a few taps on their phones. Qualification requirements are generally less stringent than for credit cards or traditional loans.<\/p>\n
While many BNPL plans advertise zero interest for repayment periods of one to three months, longer-term instalment plans can carry annual interest rates of as much as 25%. Consumers also face fees and penalties for missed or late payments.<\/p>\n
Nearly 40% of Thais, or about 25.5 million people, carry debt. Among those ages 20 to 35, the figure rises to about half. The same group accounts for more than a quarter of non-performing loans, underscoring concerns about debt accumulation early in adulthood.<\/p>\n
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For 23-year-old Thanwadee Kunasut, BNPL became part of daily life soon after she started her first job. She has used the service to split the cost of a 200-baht mala hotpot meal over three months and now relies on it for purchases ranging from food to cosmetics and household goods.<\/p>\n
\u201cIt helps when I\u2019m short on cash,\u201d she said. \u201cI don\u2019t want to ask my mom for money, so it gives me some flexibility.\u201d<\/p>\n
As she used the service more frequently, her credit limit rose to 14 000 baht from 6 000 baht. About 2,000 baht of her 17 000-baht monthly salary now goes toward debt repayments.<\/p>\n
\u201cIt definitely makes spending more tempting,\u201d she said.<\/p>\n
Thanwadee is among more than a million consumers using Shopee, one of Thailand\u2019s largest BNPL providers. Shopee Thailand declined to comment.<\/p>\n
Luxmon Attapich, chief executive officer of the National Credit Bureau Co., estimates most users are in their 20s and 30s, younger than the typical 30-to-50 age range for conventional personal loans.<\/p>\n
\u201cBNPL is becoming part of daily life for younger consumers,\u201d Luxmon said. \u201cBut financial literacy hasn\u2019t kept pace with how quickly access to credit has expanded.\u201d<\/p>\n
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The Bank of Thailand is drafting rules for BNPL providers that offer instalment loans through online platforms, Vitai said on 2 June. Proposed measures include restrictions based on age and income, limits on eligible products, minimum purchase values and caps on charges. The rules could be issued by year-end.<\/p>\n
Atome, another BNPL provider, said it welcomes a clearer regulatory framework. \u201cWe see BNPL as a financial management tool rather than a prompt to spend,\u201d the company said. \u201cUsed responsibly, it helps consumers manage cash flow and plan expenses.\u201d<\/p>\n
\u2018Long-term pain\u2019\u00a0<\/p>\n
The central bank\u2019s scrutiny comes as Thai households face renewed financial pressure. Average monthly household income fell 2.5% last year to 28 308 baht, the first decline since 2019, according to the National Statistical Office, while spending dropped 5.4%.<\/p>\n
Economists say BNPL reflects both the convenience of digital credit and deeper strains in household finances.<\/p>\n
\u201cIt\u2019s short-term gain and long-term pain,\u201d said Thitima Chucherd, head of economic and financial market research at Siam Commercial Bank Pcl. \u201cIt may help people get through a cash crunch in the short term, but it can also encourage unnecessary spending and create debt that weighs on future spending.\u201d<\/p>\n
Regulating BNPL may help contain the risks, but addressing the root causes will require stronger income growth and better financial literacy, she said.<\/p>\n
For some users, however, the service has already become part of everyday cash management. Ratree Tangjaiyoo, a 37-year-old office worker who earns about 30 000 baht a month, recently used BNPL to pay for a 40-baht matcha drink over three months.<\/p>\n
\u201cI choose instalments when I think I might run short of cash, or when I want to keep money aside for other things,\u201d she said. \u201cIt makes things feel more affordable.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Buynowpaylater #bubble #tea #highlights #Thai #debt #risk<\/p>\n","protected":false},"excerpt":{"rendered":"
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