Millennials and Gen Z Drive Indonesia's Rp29.59 Trillion Paylater Debt

1 day ago 3

TEMPO.CO, Jakarta - Indonesian people's debt in the Paylater service reached Rp29.59 trillion as of April 2025. As cited from the wantimpres.go.id, Rp8.24 trillion was distributed by financing companies and Rp21.35 trillion by banks.

Non-performing loans for Paylater were reported to have increased from 3.48 percent to 3.78 percent. Meanwhile, loan shark debt reached Rp80.94 trillion, up 29.01 percent annually, with the non-performing loan rate rising from 2.77 percent to 2.93 percent.

It is known that the usage of Paylater is dominated by millennials and Gen Z, with participation rates reaching 48.27 percent for millennials and 39.94 percent for Gen Z. Around 41.9 percent of Paylater transactions were carried out through QRIS.

What is Paylater?

According to the Financial Services Authority (OJK), Paylater is a payment service that allows individuals to defer payments or borrow money, which must be repaid at a specified time.

This payment method is preferred for various reasons, such as the convenience of transactions and the numerous Paylater service providers that offer promotions and cash back. Additionally, Paylater also provides the possibility for the public to meet their needs when their financial situation is tight, such as before payday.

Benefits of Paylater

There are several benefits offered by Paylater, including:

1. Ease of Transactions

Paylater offers an easy registration process and a loan application that can be done online.

2. Flexible Interest-Free Timeframe

The timeframe is very flexible. Each platform offers a variety of term options, typically ranging from three to 12 months. Some platforms offer interest-free loans for a limited time.

3. Can Be Done Anytime, Anywhere

Users can utilize the Paylater service anytime and anywhere as needed because all services are accessible online. Even in emergencies, users can easily access this feature.

Disadvantages of Paylater

In addition to the positive aspects, the Paylater feature has several drawbacks that need to be known before using it. Here are some of the main disadvantages of using Paylater:

1. Disrupts Personal Financial Management

The convenience of the Paylater feature can disrupt personal financial management because there are regular installment payments that must be made. In many cases, funds that should be allocated to pay installments are used for other urgent needs, resulting in delays in installment payments.

2. Unexpected Costs

Users often don't realize the additional costs involved. These costs may include subscription fees, installment fees, or other administrative fees. All of these will increase the financial burden when a Paylater bill arrives.

3. Impulsive Behavior

It encourages consumers to shop impulsively. Attractive discounts or promotions can tempt someone to shop more than necessary.

Kayla Najmi Ihsani contributed to the writing of this article

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