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E-Money and ‘riba’: Understanding the enterprise version

The term digital cash (e-money) and electronic pockets (e-pockets) come to be hype these days as the world is transferring towards a cashless lifestyle. Both e-money and e-pockets have something not unusual. They are each digitalized machine of the price. Nevertheless, e-money differs with e-pockets within the manner it shops the users’ facts. E-cash is a chip-primarily based system of payment in which all of the statistics are saved in a chip and takes the form of a card. It is generally furnished with the aid of banks, consisting of Tap Cash issued using Bank Negara Indonesia (BNI), Flazz via Bank Central Asia (BCA), E-money with the assistance of Bank Mandiri, Brizzi via Bank Rakyat Indonesia (BRI).
On the alternative hand, e-wallet is a server-primarily based device of payment which includes T-Cash, Go-Pay, OVO. However, in essence, e-pockets is likewise a form of e-cash. So, so one can avoid any confusion, e-cash terminology is used to mention e-wallet in this newsletter.
The trend in the usage of e-cash for the charge in Indonesia is developing each year. From the survey performed using DailySocial ( 2017 ), it turned into finding in 2017 that approximately fifty-six. Eight percentage of Indonesian purchasers have used e-cash in much less than 12 months, 34.4 percentage between one to 3 years, while the rest have used it for more than three years.
Bank Indonesia mentioned that by using the quiet of the fourth zone, 2017, the e-cash transaction reached for approximately Rp 12 trillion (approximately US$854.70 million). The quantity increased by using 26.2 percent to about Rp forty-seven trillion via the stop of 2018. It continued growing and predicted to rise further in 2019 as different banks additionally plan to provide their very own e-cash to their customers.
Bank Indonesia (BI) mended its previous law regarding electronic cash to tighten its manipulate over the developing circulate of the e-cash. The change changed into contained in BI’s Regulation (PBI) No. 20/6/PBI/2018 on e-cash, which supersedes its previous ruling Regulation (PBI) No. 11/12/PBI/2009 on e-money.
However, the motion faces an impediment as numerous Muslim respected scholars issued the original fatwa against e-cash. They stated that it is riba and plenty of humans strongly accompanied that character fatwa. Riba can be described as an extra/addition that can arise in each debt and sale transaction. In a sale transaction, riba occurs if the particular commodity is exchanged however extraordinary in values all through a specified period.
The fatwa against e-cash become made based totally on the preliminary assumption that the aqad (agreement) between users/customers and e-money company is qardh (debt). Therefore, in fiqh, there is a maxim that each debt producing an extra/addition/benefit is considered as riba. It is classified as one of the great sins in Islam.
The fatwa also stimulated using the hypothesis that the commercial enterprise model of e-cash is similar to banks’ since it runs at the commercial service enterprise. It isn’t the identical. In the financial institution industry, the enterprise model is obvious; that is, banks continue to exist by rotating consumers’ money to the 0.33 celebration in numerous methods. The financial institution will get an advantage (margin or price) from the 1/3 celebration because the result of rotating consumers’ money, and the clients will also get similar to the reward for ‘lending’ the money to the banks. Without customers’ money, banks will never continue to exist. Then, it is understood that in the bank industry, debt is the core enterprise version. Consequently, following the fiqh maxim as mentioned previously, the hobby consumers get from the bank is considered as riba. The commercial enterprise version of e-money isn’t always just like the banks.
In nowadays’s disruption generation, a commercial enterprise may be disrupted by every other business inside comparable industry but with a one-of-a-kind business version. For instance, Netflix gives clients a few movies precisely as movie theater does. However, Netflix isn’t a movie theater due to the fact their commercial enterprise model isn’t the equal. University and college provide society with training and expertise precisely what Khan Academy does. However, Khan Academy is not a university or faculty because they have an excellent enterprise version.
Similarly in the case of e-cash and banks. Banks and e-cash vendors offer clients with commercial offerings. However, e-cash carriers aren’t banks! E-cash companies do not live to tell the tale by way of rotating customers’ cash, and it is regulated by way of the authorities. Based at the Bank Indonesia Regulation (PBI) No. 20/6/PBI/2018 on e-cash article no. 49 verse no. 1, it’s far said that e-cash vendors are allowed to use the users’ cash handiest to meet their obligation to the customers. This law is likewise agreed through Go-Pay as it is stated on its’ website.
By this, it is clear that the character fatwa referred to earlier is upfront made. Since the e-cash providers are prohibited from using customers’ cash, so it’s far implied that the transaction between e-money vendors and the users is not hard; however Sejarah (exchange of carrier). As a consequence, the discount or cash returned is given through e-cash providers to the customers are not considered as riba. It is authorized and halal.

Deborah Williams
Snowboarder, foodie, ukulelist, vintage furniture lover and identity designer. Making at the intersection of minimalism and mathematics to create strong, lasting and remarkable design. I work with Fortune 500 companies and startups. Award-winning beer geek. Twitter fan. Social media scholar. Incurable travel advocate. Alcohol expert.