SHARIAH-COMPLIANT E-PAYMENT FRAMEWORK IN MALAYSIA: INTEGRATING FIQH, DIGITAL SECURITY AND REGULATORY GOVERNANCE

Abstract

The rapid growth of e-commerce and digital payment systems presents significant challenges for Shariah compliance, particularly concerning riba (usury), gharar (uncertainty), and the validity of online contracts. Despite Malaysia’s increasing adoption of e-payment systems, a structured framework ensuring full adherence to Islamic principles remains lacking, leading to uncertainties in contract legitimacy, transactional risks, and regulatory oversight. This study aims to develop a Shariah-compliant solutions for e-payment systems by integrating Islamic legal principles, technological safeguards, and regulatory measures. Using a qualitative approach, the study analyzes Islamic jurisprudence, regulatory guidelines, and technological solutions to identify core Shariah concerns, such as riba in credit-based transactions and the need for a dedicated regulatory body. The proposed solutions includes a Shariah compliance framework, robust encryption and digital signature mechanisms, a specialized Shariah advisory body for e-commerce, and legal provisions to govern online transactions. The findings provide a structured approach for policymakers, financial institutions, and e-commerce stakeholders, contributing to the advancement of Islamic fintech and supporting Malaysia’s position as a global leader in Islamic digital finance.