E-Wallet Models: An Appraisal of Sharia-Related Issues

Abstract

This paper aims to evaluate the existing e-wallet business models and to provide a preliminary analysis of sharia issues, specifically related to the relationship of the involved parties in the contract (operators, customers, and third parties). As e-wallet is also a critical enabler to increase financial inclusion among the different levels of society members (richer and poor), thus there is an increasing need to analyze the existing e-wallet models and their practices. The final aims are to preserve all parties' rights and support the policymakers to structure e-wallet parameters that comply with Islamic law. This paper adopts qualitative research approaches, specifically content analysis and interviews. The data collection includes, among others, document reviews, interviews, and observations. The paper evaluates four e-wallet models in Malaysia and analyzes arising sharia issues from those models. In the models, several sharia issues can be found, which are related to the contracts used, the status of funds held by e-wallet providers, deposits in banks, and revenue generation. Findings from this paper serve as a basis for scholars and policymakers to provide guidelines for sharia-compliant e-wallets.