From Intention to Indebtedness: A Narrative Review on Behavioral, Financial, and Islamic Finance Determinants of Buy Now Pay Later (BNPL) Usage in Malaysia

Abstract

The rapid expansion of Buy Now Pay Later (BNPL) services in Malaysia has reshaped consumer finance by offering interest-free instalment options as alternatives to conventional credit instruments. Despite enhancing accessibility and payment convenience, accumulating evidence links BNPL usage to rising household indebtedness and impulsive consumption behaviour. National data reveal that as of June 2025, 168,967 Malaysians recorded overdue BNPL balances totalling RM3.8 billion, indicating growing financial vulnerability. This review synthesises recent empirical studies published between 2023 and 2025, focusing on BNPL adoption and usage behaviour within the Malaysian context, supported by selected regional studies incorporating Malaysian data. Anchored in behavioural finance theory and Islamic ethical perspectives, the review adopts an integrative behavioural-financial framework. Key determinants influencing BNPL usage are categorised into technological, psychological, financial literacy and religious awareness dimensions. The findings indicate that perceived usefulness, convenience, and social influence drive BNPL intention, while financial literacy, self-control and perceived risk moderate responsible usage. The review advocates integrating behavioural and Islamic consumer awareness constructs to promote financially sustainable and ethically aligned BNPL practices.