What payment options (e.g. credit cards) are permissible if I am selling on a website?

The question you have asked has no simple answer at all, and below is my brief explanation of options available to you although some suggestions are controversial and there are valid differences of opinion. And Allah knows best.

Firstly, all online purchases function by utilising one of the following options:

i) Debit cards

ii) Credit cards

iii) Electronic transfers from bank account

1. The use of a debit card is technically permissible under Shari’ah, as it functions in such a manner where it simply relies on a positive balance of funds available from one’s bank account attached to this particular card.

2. The use of a credit card is definitely impermissible under Shari’ah. Its function is not connected to one’s positive balance of funds, but that which creates a debt at the point of transaction to which Riba (interest) is inherently and contractually attached. The fact that a 0% interest may be applicable if a person pays the funds used, is besides the point.

Some notable and reliable Scholars have approved the use of credit cards as a means to avoid harm and difficulty, and this is a valid opinion. What this means is that the credit card would only be used where there is no other option available where payment must be made, e.g., travelling internationally can be problematic because many hotels only accept credit cards (and not debit cards). The important point to realise is that the use of it is still impermissible, but the principle “lesser of two evils” is applied, where the credit is permitted to be used AS LONG AS the person pays the amount used well within the timeframe such that neither interest is incurred nor paid.

It is important to note that any credit card that is used by the purchaser which does not have a no-interest (0%) period is categorically impermissible.

3. The use of electronic transfers from a registered ban account is definitely permissible and the most Shari’ah compliant. In this system, e.g., Paypal, the purchaser simply pays for goods and services by allowing the seller or its agent to deduct the appropriate amount from an existing bank account which has a positive balance.

As a seller, accepting payment via credit cards is at least problematic, to say the least (of course accepting payment via debit cards and electronic transfers, are fully permissible). There are two issues connected to such a matter:

i) The legal ruling

ii) The ethical status

Legally, there is technical permissibility, because you are not the person initiating or demanding an interest payment on the use of the card facility. The fact that you simply and ultimately receive the actual money from it is technically permissible and is really a due- process.

Ethically, there are many problems, and is amongst the matters within the grey area that the Messenger of Allah, may the peace and blessings of Allah be upon him, warned us against and informed us to avoid. We will be questioned by Allah Ta’ala for involving ourselves in actions that itself lead to (and knowingly) harm and harmful impact. Ultimately, the use of credit cards has a significant and global economic problem, and is the source of a great amount of false levels of wealth of corporations, banks and certain individuals- the very thing Islam intends to eliminate. Further, the same ethical question arises regarding the actual banking system itself, which is the number one source of global poverty.

So, you can see, the issue is not simple at all. In such matters you will need to make your own objective and sincere decision as to what you will engage in and what you will not. My personal opinion is the online payment systems where people are given the option to use debit, credit and electronic transfer is the best: people make the entire decision and you as the seller simply and only collect what is deservedly your money. Paypal is the soundest of such services (there are other transaction gateways similar to Paypal). My personal opinion is merely to provide a facilitated ease in the difficult times we live in by minimising open and direct abuse of the Shari’ah as a Muslim.