Indonesia’s Buy-Now-Pay-Later Legal Framework
Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan or “OJK”) has formally introduced a regulatory framework governing the Buy Now Pay Later (the “BNPL”) services through the issuance of OJK Regulation No. 32 of 2025 on Provisions of Buy Now Pay Later (“Regulation 32/2025”). Regulation 32/2025 took effect upon its promulgation in December 2025, marking a significant milestone in the regulation of digital financial services in Indonesia.
♦ Scope and Eligible Providers of BNPL
Under Regulation 32/2025 BNPL services may be provided by the following financial service institutions (lembaga jasa keuangan or an “LJK”):
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- commercial banks (the “Banks”); and
- financing companies,
(collectively, the “Providers”).
Under Regulation 32/2025 BNPL services provided by Banks must be in accordance with the banking laws and regulations. Meanwhile, financing companies may only provide BNPL services after obtaining a prior approval from OJK. The procedures for obtaining such approvals will be determined by OJK in due course.
♦ Characteristics of BNPL Services
BNPL services provided by the Providers must have the following characteristics:
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- BNPL services are only for the purpose of financing purchase of goods or services;
- BNPL services are without any encumbrance;
- there is a maximum amount of financing of the BNPL services;
- repayment of the principal amount and payment of the interests must be based on an agreement with users;
- approvals from users may be based on face-to-face electronic meetings or non-face-to-face electronic meetings; and
- BNPL services are done through the electronic systems.
♦ Obligations of Providers of BNPL Services
Regulation 32/2025 provides that BNPL services may be provided conventionally or based on sharia principles by the Banks and the financing companies. In this regard, Regulation 32/2025 introduces a number of substantive obligations aimed at strengthening prudential oversight and consumer protection in BNPL services, which include the following:
- Prudential Principles and Consumer Protection
The Providers must apply prudential principles in providing the BNPL services in accordance with applicable laws and regulations. This includes establishing internal policies and guidelines to assess the eligibility of BNPL customers, implementing consumer protection principles (as currently regulated under OJK Regulation No. 22 of 2023 on Consumers and Public’s Protection Within the Financial Services Sector (“Regulation 22/2023”)), and ensuring the protection of customers’ or debtors’ personal data in compliance with prevailing data protection laws and regulations.
- Cooperation with Third Parties
The Providers may cooperate with third parties (for instance, e-commerce/marketplace) based on cooperation agreements. However, these cooperation agreements remain subject to customer information disclosure obligations.
- Information Disclosure
The Providers are required to provide, disclose, and market BNPL services transparently to prospective or existing customers in accordance with Regulation 22/2023. Information to be disclosed through electronic systems includes the source of financing funds, the amounts and the payment installments, and/or other information as determined by OJK.
Note that failure to disclose the required information may subject the Providers to the imposition of administrative sanctions by OJK. These sanctions may be as follows:
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- written reprimands;
- partial or full restriction of products and/or services and/or business activities;
- partial or full suspension of products and/or services and/or business activities;
- dismissal of management;
- administrative fines, up to a maximum of Rp 15,000,000,000; and/or
- revocation of issued permits.
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- Collection Practices
The collection of BNPL payments must be carried out in compliance with Regulation 22/2023.
- Reporting Obligations
The Organizers are required to prepare reports on the implementation of their BNPL services and submit such reports to OJK in accordance with applicable laws and regulations.
♦ Transition Period for Existing BNPL Services
Recognizing that BNPL products have already been widely offered prior to the issuance of the Regulation 32/2025, there is a six-month transition period from the enactment of Regulation 32/2025 up to June 15, 2026. During such period, the Providers that currently provide BNPL services must align their existing products and operational frameworks to ensure full compliance with Regulation 32/2025.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Adhitya Ramadhan (aramadhan@aksetlaw.com), or Azzahra Saffanisa Sudiardiputri (asudiardiputri@aksetlaw.com) for further information.
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