Developing Shariah-Compliant FinTech Buy Now, Pay Later (BNPL) Models

Buy-now, pay-later (BNPL) point-of-sale financing has rapidly expanded through fintech-led checkout integration and is now growing in physical retail. Offering both interest-free and interest-bearing installments, BNPL attracts consumers who avoid credit cards and those with limited or poor credit access. It already represents roughly 7% of global payment transaction value and is expected to be the fastest-growing payment method worldwide. As BNPL scales, Islamic financial service providers must assess prevailing models through Islamic legal and ethical principles to develop genuinely Shariah-compliant structures for Muslim consumers and others avoiding interest-based products. This research analyzes fintech-based and bank-issued BNPL models from a Shariah perspective, finding that some interest-free structures can be viable, Shariah-compliant alternatives to conventional credit cards—and may even be more compliant than some “Islamic credit cards.” The study proposes Shariah-compliant BNPL models, evaluates platforms marketed as compliant (e.g., Tabby, Tamara), and argues that expanding BNPL into healthcare, education, and B2B can advance Maqasid al-Shariah by enabling needed credit without interest.

Hamad Bin Khalifa University (HBKU)