Fast Track your Sharia Compliant eMoney adoption with PayHalal Payment Gateway

Shariah contracts for e-money is the agency contract (wakalah), whereby the approved issuer acts as an agent to make payment on behalf of the user (wakil bi ad-daf`i) to the merchant. Therefore, the funds received from the user shall be placed in a Shariah compliant trust account or a dedicated deposit account as required pursuant to section 137 of the Islamic Financial Services Act 2013.

Get your Sharia Compliant Payment Gateway for your sharia Compliant eMoney scheme

PayHalal shariah compliant payment gateway, payment processors and merchant account – If you are an eCommerce merchant in the halal and Islamic space,  these are all necessities you need for selling online. What is less clear for most people, are the ins-and-outs related to each of these concepts and how choosing and configuring them can impact your business. Whether you are an halal eCommerce merchant looking to set up your first store or a growing halal business interested in switching to shariah compliant payment providers, here are some important information to help you brush up on a critical aspect of selling to Muslims online.

What is a shariah compliant payment gateway?

A sharia payment gateway refers to the technology that is specifically built to cater to shariah transaction contracts – The essence of shariah transaction contracts (are mutual consent or agreement by both contracting parties and the consequence of a contract are based on rights and responsibilities agreed therein) in a system that hosts and connects shariah, halal verified merchants of all kinds—not just online merchants—and payment networks.

        •       PayHalal integrates with your online store. Essentially, it gives your store one or more ways to integrate online Islamic credit card, shariah compliant eMoney( eWallet) , Islamic banking processing capabilities with your business operations.

        •       PayHalal securely captures payment details for customer transactions. The merchant sends the shopper’s information to PayHalal payment gateway via tools provided by PayHalal, which includes smart Aqad (Islamic transaction contracts). To transmit these details securely, the gateway encrypts the payment information during transmission.

        •       PayHalal routes that information to a payment processor or an acquiring bank. The acquiring bank takes over at this point. The acquiring bank may do some fraud screening and then routes the transaction to the card networks.

        •       PayHalal sends an approval or decline message back to the merchant. Based on the yes or no response, the merchant may either direct the shopper to a confirmation page, or ask them to provide another form of payment.

How Payment Gateways Work

What is the difference between payment gateway and payment processor?

PayHalal Payment processors provide direct connections for shariah compliant merchants to receive online banking, eMoney and/or credit card networks like Visa or Mastercard; it is suitable for large organisations such as takaful companies and other payment companies who wishes to provide shariah compliant payment technology services. PayHalal payment gateways connect shariah compliant merchants with Islamic processors, who then, in turn, connect you to the credit card networks. Large payment processors do not work directly with online businesses; instead they make reselling agreements with payment gateways to provide their services to merchants. (Some payment processors will work with online businesses directly if they are large enough.)

Beyond The Essentials: What makes PayHalal payment gateways different from others?

While every payment gateway does the above, that only provides the basics. PayHalal shariah compliant payment gateways is the only one in the Islamic payment space with a Fatwa pronouncement which goes beyond the function and offers a myriad of other services surrounding shariah payment processing, for instance,

        •       Multiple payment solutions including online banking, eMoney, credit cards, debit cards are not the only way to pay for goods and services online. Many shoppers prefer to use contactless payment instruments especially if you are selling globally, so you need more than just a credit card payment gateway serving Muslims.  As many Muslims prefer only Islamic payment instruments, PayHalal provides support to a variety of payment options so you can attract and retain a greater number of customers.

        •       Fraud and Halal protection services – Online businesses are at risk of attack every time they accept a payment. If your fraud level gets out of control your business will be negatively impacted in the form of chargeback fees and penalties, lost merchandise and reputational harm. That includes carrying out transactions on prohibited items according to Islam and transaction that is not compliant to a specific transaction contract. PayHalal acts for your benefit to ensure only halal and shariah compliant transactions are undertaken via PayHalal payment gateway that has strong fraud, halal and shariah compliance detection and prevention tools.

        •       Billings and recurring payment facilities –  Many businesses use a subscription model to sell goods. It will make your life easier to find out that PayHalal payment gateway provides and  manages automated billing, sends out payment reminders, sets up customizable billing plans, and automatically updates shoppers’ subscription payment information.

        •       Detailed payment and big data analytics – Having detailed payments data can help you make better, more informed decisions about how to improve your business. PayHalal payment gateways give you access to a variety of payment analytics and reports that paint a complete picture of where your payment process is succeeding and where it needs some work.

If your current payment gateway does not have these capabilities, you will have to find other ways to satisfy these needs—for instance, you will have to integrate to a separate fraud engine, halalCart, halal data pool, halal ingredients eCodes and sharia smart Aqad AI engine, in addition to your payment gateway. (Going without a fraud, halal and sharia non compliance tool is not recommended if you want to run a healthy, successful business serving Muslims.)

The best strategy for most online businesses is to find a single house Islamic payment gateway that does it all-in-one sharia compliant payment processing solution which supports sales anywhere in the world, provides strong fraud protection, halal and shariah compliance protection that gives detailed payment analytics and has robust subscription functionality. You will find that working with PayHalal payment gateway not only gives added surety but it reduces sharia non compliant payments, gives you a reliable partner that helps you maximize revenue without having to write off shariah non compliant income derived from sales transactions.

What does a shariah compliant merchant account mean?

PayHalal merchant account is an account that enables merchants to process online credit and debit payments. PayHalal payment gateway sets up the account for you and deposits the payment transactions from your credit card sales there. According to a designated schedule as determined by your service contract, the sales proceeds are automatically transferred from your merchant account into your business Islamic bank account, which you set up for yourself.

A merchant account is different from a business bank account, a point that often causes confusion. You (merchants/sellers) have no control over your merchant account – it is a holding place for sales proceeds. Why can’t the sales proceeds be deposited directly into your business bank account? Since there are incidences of disputes, fraud, non compliant transactions, haram goods and merchandise returned, there is always the chance that some money you receive as an online seller will be refunded back to the consumers (buyers), which increases a certain level of risk in your transactions. Returns are subtracted from whatever held in the merchant account at that time – the remaining funds are then transferred to your bank account.

It also simplifies Payment reconciliation for your accounting department.

You can change your merchant account provider without changing your Islamic bank relationship.Ecommerce merchants sometimes think that when they change from conventional to shariah merchant account, they have to change their entire Islamic banking relationship. That is not true.Because the shariah compliant merchant account is simply a holding place for online banking, e-wallet and credit card transaction proceeds, you do not have to change your bank account to match the banking institution your payment provider uses. For instance, you could retain your existing business Islamic bank account and still choose PayHalal without altering your bank relationship.

How do you get a merchant account?

PayHalal payment gateway providers, is an end to end shariah compliant full-service payment solution provider, which means we provide shariah compliant eCommerce merchant accounts to our customers along with a Islamic payment gateway and processing solution.

With other conventional payment gateways that’s not always the case—some payment gateways leave the merchant account setup to you. That is not the ideal situation; the fewer providers you have, the better. PayHalal  payment service provider gives you a merchant account and handles settlement payouts.

Beyond The Essentials – What makes some PayHalal shariah compliant eCommerce merchant accounts different from others?

There are two primary things that differentiate merchant accounts:

        1.      PayHalal provides Muslim consumers added surety that what they buy, subscribe and book on a global commerce is halal and shariah compliant, secure and easier. To facilitate multi currency merchant accounts, a shariah compliant – payment gateway provider will only board merchants selling halal certified goods and services. So if you are looking to grow your halal business globally, it is a good idea to set up a shariah compliant eCommerce merchant account with PayHalal.

        2.      PayHalal has a very sophisticated underwriting process. Not all merchants have an equal level of risk for their shariah compliant transactions, something that should be taken into consideration during the underwriting process. A customized underwriting process leads to fewer problems down the road and helps avoid an unexpected shutdown of the account due to miscalculations.

        3.      Some are shared or aggregated accounts. Some eCommerce merchant accounts are shared among all the merchants serviced by the payment gateway. That means your risk profile is blended in with all the other non-halal and shariah compliant merchants in the pool—which is not permissible for Muslims. Before you sign on with a payment service provider, as a Muslim eCommerce entrepeneur or merchant (who sells to Muslims), check if you will have a dedicated shariah compliant merchant account or aggregate conventional account and consider how that might affect your online halal and shariah compliant business.

PayHalal, an ideal all-in-one shariah compliant eCommerce payment platform

Payment gateways and merchant accounts might sound complicated but they do not have to be.

PayHalal can give you everything you need—a payment gateway, merchant account and a host of advanced processing features including social media and whatsapp payment solutions —to sell anywhere in the world successfully. Our all in one gateway is secure, reliable, fast and above all shariah compliant. You can also rely on us for personalized guidance and support when you have questions or set out to conquer new sales territories.

Do you have payment challenges we can help with?

Email us pat@payhalal.my

Published by PatSalam

PayHalal Islamic Payment Gateway

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