PayHalal fintech started as an idea to serve the under served Muslim consumers around the World . We started with extensive market research and Islamic financial studies on how to serve Muslims according to shariah Law . What was more evident is that over 70% of the global halal supplies, manufacturers, retailers are non muslims and coupled with multiple issues including questionable halal certifications, have caused muslims around the world to be very cautious of making purchases online . This is due to the rise of religious conservatism that is sweeping the muslim world at a record speed. The trend comes amid broader societal change in the world’s biggest muslim-majority countries, driven by tens of millions of young, ‘born-again’ muslims embracing stricter interpretations of Islam.
The hijrah trend has created an opportunity for halal e-commerce and shariah compliant fintech, The estimated GDP of the world is to be around US $528 trillion out of which more than 75% falls within halal segment. However 3 main problems remains for muslims first, on riba – usury labelling riba as “tens of times more sinful than committing adultery with your own mother” which can come through direct exposure, through lending. The concept of riba al-fadl refers to exchange or sale transactions in trade which effectively result in the charging of ‘interest’ through the exchange of the same commodity, but of a different quality or quantity which is very common, especially in the e-commerce platforms. The second barrier for Islamic e-commerce or digital economy is gharar fahish.
An excessive degree of gharar renders a sales contract or transaction void from a shariah point of view. Gharar represents some form of asymmetric or incomplete information and/or deception, in addition to risk and uncertainty as to the subject matter of an exchange based contract. For gharar to invalidate a contract, it must affect its main elements; the underlying price and object of exchange. An example is the sale of an incompleted product (while it is still in its raw materials) in the shariah parlance (this sale is known as ba’i habal al-hablah). Gharar fahish arises in such a case because the unfinished product may be unsafe to be consumed and hence the buyer would receives a product that cannot be eaten or used for the money paid to the seller; and finally the third barrier to Islamic e-commerce is maisir. Maisir is prohibited by Islamic law on the grounds that the agreement between participants is based on immoral inducement provided by entirely wishful hopes in the participants’ minds that they will gain by mere chance, with no consideration for the possibility of loss as wishing something valuable with ease and without paying an equivalent compensation for it or without working for it or without undertaking any liability against it, defines it as “the acquisition of wealth not by effort; also receipt of money, benefit or usufruct at the cost of others.” The other uncertainty on the halal front we realised are muslim consumers are faced with fear of uncertain halal status or the validity if the certification authority of the goods manufactured or imported from outside their native countries.
This were the fundamental inspiration that led to the invention of PayHalal wakalah (authorised Representative) payment technology. PayHalal received its shariah attestation on the 7th of July 2017 from Datuk Dr Daud Bakar, an imminent shariah scholar who is the founder of Amanie Shariah Advisors whom also holds various official roles including Malaysia Central Bank Shariah Council Chairman and Malaysian Islamic Religious Council Chairman.After that it took about 2 and a 1/2 years for us to build the technology ground up, led by Pat Salam and Tom Groppenberger. Technology suites include Islamic payment switch, CMS / Islamic eMoney management system, Islamic merchant acquiring technology that includes halal cart AI that verifies and checks out only halal goods for payment, Islamic payment processor and SNC (shariah non compliant) treatment, AI robo and purifier. The technology is regarded as a blockbuster in Islamic financial world and regarded as a world’s first.
On the 2nd of May 2019, PayHalal Payment technology early adopter were Zurich Takaful followed by PPZ MAIWP, MAIK (zakat collector) and some e-commerce retailers, who believed that Payhalal payment technology will provide added surety for their customers and it will reduce SNC profit write offs .
PayHalal PSaaS see opportunities to export its software as services to Indonesia as the demands for Islamic Fintech software as a service is growing rapidly in this largest Muslim population .
PayHalal was invited to form a spv (special purpose vehicle) with Yayasan Desa Emas, a vehicle of the Indonesian government, to create a cashless community for its 800 provinces throughout Indonesia and a MOU was signed with Desa Emas’s spv PT Kirana on the 13th November 2019. The process of Setting up operations in Indonesia is on its way.
On 21st January 2021, PayHalal’s operating company Souqa Fintech received its BNM merchant acquiring approval to conduct merchant acquisition and payment processing and settlement for e-commerce business. With this PayHalal has entered into halal e-commerce payment which is a high growth rate segment with recurring income, great potential for scale and loyal user base, given the fact 60% of Malaysia’s populations are muslims. Payhalal foresee it will be serving over 3 million merchants and 80 million Muslim users by 2026 across key markets such as Malaysia , Indonesia , Brunei , Singapore KSA , UAE and Bangladesh . In order to meet its global expansion, Payhalal will be exercising a fundraising campaign which it believes will attract shariah compliant funds that will enable the company to go beyond retail and wholesale payments.
The future of Islamic fintech in Malaysia and in Asia is growing at an unprecedented rate, making the combined Islamic countries one of the fastest-growing fintech markets, ahead of the uS and China . The next decade will also see a boom for IPOs. The number of IPOs in SEA is expected to cross 300 by 2030, as more local startups seek an exit in domestic public markets.
Insh’Allah PayHalal will be one of those superApps unicorns.