Review of Payment Systems in E-Commerce from a Shariah Perspective; a Case of Pakistan

Abstract

The Information and Communication Technology era, coupled with digital innovation, has significantly reshaped the business landscape. This transformation has seen a shift from cash-based transactions to electronic ones, driving an immense surge in e-commerce activities. However, this surge has raised concerns among Muslims regarding the Shariah compliance of online transactions, especially in payment methods like credit cards.This study aims to evaluate the viability of integrating Shariah principles into e-commerce payment modes, addressing the challenges faced by Muslim consumers in online transactions. It specifically compares and scrutinizes two e-commerce frameworks: the conventional model and a Shariah-compliant structure. To accomplish this, a qualitative, comparative exploratory research design with an interpretive approach has been adopted.The core argument presented in the article is that electronic payments can align with Shariah under principles of Islamic contract law. This law mandates that transactions must satisfy Shariah's fundamental requirements, especially in payment methods, and must not involve Riba (Interest) or Gharar (Uncertainty). By upholding these principles within the realm of e-commerce, this research endeavors to maintain trust, transparency, and certainty in online transactions, making a significant contribution to the field.

 Keywords: E-Commerce; Islamic law of contracts; Islamic jurisprudence, Shari’ah Compliance; Islamic Ethics; e-business.