Scams, growing debt as users desperate for cash tap into credit from buy-now-pay-later platforms
Southeast Asian countries have seen the emergence of a parallel market of lenders and borrowers as fintech companies hesitate to put guardrails in place.
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This article was originally published in Rest of World, which covers technology’s impact outside the West.
Dang Thi Han, who works at a spa in southern Vietnam, was short of cash in early June. So she turned to a Facebook group she had heard of – “Shopee SPayLater wallet community”. She found someone willing to transfer cash to her if she used the buy-now-pay-later option on the Shopee e-commerce platform to pay his utility bills. Han did so, only to never hear from him again.
The buy-now-pay-later feature is near-ubiquitous in e-commerce. But its rapid growth is powering a gray market of peer-to-peer loans, also known as cash-outs, in Southeast Asia. Hundreds of buy-now-pay-later cash-out groups on Facebook connect lenders with bills to borrowers in need of cash. But lenders can disappear without making the promised payment, and borrowers sometimes do not pay the bill in full.
“I’m not the only one who got scammed on Shopee SPayLater – there are many others, too,” Han, 21, told Rest of World.
She paid 611,000 dong ($24) on the user’s utility bills, with the understanding that he would transfer the cash to her after charging a small fee. But he disappeared.
“I have to pay a high interest [on the amount] every month”...
