Legal analysis of Buy Now Pay Later (BNPL) services and the urgency of consumer protection in Indonesia’s digital financial sector

The rapid expansion of Buy Now Pay Later (BNPL) services in Indonesia reflects a broader shift toward digital finance and consumer-driven innovation. While BNPL offers convenience and financial flexibility, it operates within a legal and regulatory vacuum that raises significant concerns regarding consumer protection, legal classification, and data governance. This paper examines the legal dimensions of BNPL through a normative juridical and comparative legal approach, assessing how Indonesian law currently addresses—or fails to address—BNPL practices. The findings reveal that BNPL services remain unclassified under existing financial and consumer protection laws, leaving consumers exposed to non-transparent terms, inadequate dispute resolution mechanisms, and unchecked data exploitation. Drawing on regulatory models from Australia, the United Kingdom, and Singapore, the paper proposes a series of legal reforms including statutory recognition of BNPL as a financial product, mandatory affordability checks, enhanced transparency standards, and the integration of dispute resolution systems. Ultimately, this study advocates for a hybrid regulatory framework that balances innovation with enforceable consumer safeguards, emphasizing the need for urgent reform before the risks of BNPL become entrenched and systemic within Indonesia’s digital economy.