‘Buy now, pay later’ schemes take off in Indonesia’s online shopping malls, as digital loans boom
- More Indonesian shoppers are using pay-later methods to buy items ranging from jeans to flight tickets, given the ease with which a loan is approved
- But as online borrowing rises, experts warn the nation’s financial literacy needs to improve and that data-protection laws should be in place
When Evie Khusnul Khotimah logged in to her account on the online shopping app Shopee in May, a curious new payment method caught her attention.
The service, called PayLater, allows buyers to purchase items first and settle payments afterwards.
Intrigued by how this worked, the 24-year-old freelance writer from Indonesia gave the new scheme a try – and she has been sold ever since.
“I’ve bought over 10 items with PayLater, the most expensive being a pair of pants that cost 300,000 rupiah (US$21),” said Evie, who lives in Samarinda in the east of Borneo. “I always pay my bills on time, without instalments. Since I don’t have a credit card, I did not know how it works, but PayLater is teaching me how that works.”
Some brands that have jumped on the bandwagon include on-demand services giant Gojek, ticketing platform Traveloka, e-commerce heavyweight Tokopedia and e-wallet Ovo.
