Faspay Blog

Find out about online business tips, payment technology, digital marketing, and everything you need to know about Faspay.

Faspay > Sharia Payment Gateway: What It Is and How to Choose One

Sharia Payment Gateway: What It Is and How to Choose One

Table of Contents

Sharia payment gateway is a digital payment solution that helps businesses accept and process transactions while taking relevant Sharia principles into consideration.

For businesses operating based on Sharia principles, a payment process should not only be convenient and secure but also align with the principles underlying their business activities.

So, how does a Sharia payment gateway work, and what should businesses consider before choosing one? Find out below.

What Is a Sharia Payment Gateway?

A Sharia payment gateway is a digital payment system that facilitates transactions between businesses and customers while considering relevant Sharia principles and requirements.

In general, a payment gateway helps businesses accept and process payments through multiple payment methods digitally. However, in a Sharia-based context, the technology itself is not the only aspect that needs to be considered.

The transaction mechanism, clarity of contractual arrangements, transparency of information, and the nature of the transaction or underlying goods and services can also be relevant.

In Indonesia, the National Sharia Council of the Indonesian Ulema Council (DSN-MUI) has issued guidance on online transactions based on Sharia principles, including Fatwa No. 146/DSN-MUI/XII/2021 concerning Online Shops Based on Sharia Principles. The guidance addresses, among other things, clarity in contractual arrangements, permissible transaction objects, and transparency of information.

In short, a payment gateway is the technology used to process payments, while the Sharia aspect relates to whether the overall transaction mechanism and the relationships between the parties follow relevant Sharia principles.

How Does a Sharia Payment Gateway Work?

A Sharia payment gateway works by facilitating digital transactions between customers, businesses, and payment providers while supporting a transaction mechanism that takes relevant Sharia principles into account.

The general process typically involves the following steps:

A customer selects a product or service.
The business displays the price and relevant transaction information.
The customer chooses a payment method.
The payment gateway processes or forwards the payment instruction.
The system verifies the transaction.
The business receives a payment notification.
Funds are processed according to the applicable settlement mechanism.

In a Sharia-based transaction, important information—such as the goods or services being purchased, the price, and the payment terms—should also be clearly communicated to the parties involved.

This emphasis on clarity and transparency is an important consideration in online transactions conducted according to Sharia principles.

What Are the Benefits of a Sharia Payment Gateway for Businesses?

A Sharia payment gateway can help businesses accept digital payments while supporting transaction requirements that take relevant Sharia principles into account. Potential benefits include the following:

1. Supporting Consistency in Sharia-Based Businesses

For businesses offering Sharia-based products or services, payment is part of the broader business ecosystem.

Choosing a payment solution that aligns with the business's requirements can help create greater consistency between its values, operations, and transaction processes.

2. Building Customer Trust

For customers who consider Sharia principles when choosing products or services, clear and transparent transaction processes may help build trust.

Payment is also one of the final stages of the customer journey. A clear and straightforward payment experience can help reduce uncertainty before a purchase is completed.

3. Making Digital Payments Easier to Accept

Like payment gateways in general, a Sharia payment gateway may help businesses accept multiple digital payment methods through a more centralized process.

Depending on the provider, available payment methods may include:

virtual accounts;
QRIS;
bank transfers;
cards; or
other digital payment methods.

4. Improving Transaction Management

Payment gateway solutions can also help businesses manage transactions through a more structured system.

Depending on the provider, available features may include:

transaction dashboards;
payment notifications;
transaction reports;
API integrations;
payment links; and
other integration methods.

How to Choose a Sharia Payment Gateway

To choose a Sharia payment gateway, businesses should evaluate its Sharia-related framework, fee transparency, security, available payment methods, integration options, and settlement process.

Here are several factors to consider.

1. Review the Basis for Sharia Compliance

Do not choose a provider based solely on a "Sharia-compliant" claim. Make sure the business understands the framework and mechanisms supporting that claim.

Consider asking:

Is there documentation explaining the provider's Sharia compliance framework?
Who is responsible for reviewing or overseeing Sharia-related compliance?
What governance mechanisms are in place?
How does the provider handle transactions that may not align with the principles being applied?

If your business requires formal Sharia compliance assessment, consult a qualified professional or institution with the appropriate expertise and authority.

2. Make Sure the Fee Structure Is Transparent

Businesses should understand the payment gateway's fees before using the service.

Check for:

transaction fees;
integration fees;
additional service fees;
refund fees;
settlement fees; and
other terms that may affect operational costs.

Rather than comparing transaction fees alone, consider the total cost based on your business's transaction volume and payment patterns.

3. Match Payment Methods With Customer Preferences

The right payment gateway should offer payment methods that are relevant to how your customers prefer to pay.

If payment data is available, use it to identify the most frequently used payment methods.

For example, if most customers prefer QRIS and virtual accounts, improving the payment experience for those methods may be more valuable than simply choosing a provider with the highest number of payment channels.

4. Review the Provider's Security Measures

Security should be a key consideration when choosing a payment gateway.

Businesses should understand how the provider addresses:

data protection;
authentication;
suspicious transactions;
fraud risks;
system disruptions; and
transaction disputes.

5. Understand Settlement and Reconciliation

A clear settlement and reconciliation process can help businesses manage transactions more effectively.

Before choosing a provider, ask:

When will funds be received?
How are transaction statuses reported?
How are failed transactions handled?
How does the refund process work?
How can transaction reports support reconciliation?

Conclusion

A Sharia payment gateway is a digital payment solution that helps businesses accept and process transactions while considering relevant Sharia principles and requirements.

However, businesses should not choose a solution based solely on a "Sharia" label. Before selecting a payment provider, evaluate the transaction mechanism, the basis for any Sharia-related claims, fee transparency, security, payment methods, integration capabilities, settlement processes, and operational requirements.

The right payment infrastructure can help businesses create a more efficient payment experience while supporting their broader operational needs and the principles they aim to apply.

Visit Faspay and register your business as a merchant to explore a secure and reliable payment gateway solution for your business.