Are Payment processors Mastercard VISA sharia-compliant?

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#1

hi all
I have some questions regarding zoya checks

  • Credit Cards companies like VISA and Master Card are sharia compliant, but they take interest on payment when done partially
#2

Visa and MasterCard are payment processors, and not banks themselves. They do not collect interest. Their income comes in the form of transaction fees.

There’s an article on Islamicly that I’m not able to link but you can search for it, titled " Are Payment processors Mastercard | VISA |
American Express Shariah Compliant? 21st July 2020"

#3

Thank you for your answer. The article is not so convincing.

  • The merchant (receiver) is always a bank or financial institution
  • An interest will be applied if the amount is not paid. Even if we say that V/MA are just payment processors and take only fees, they enable /participate/connect/move money in such transactions

I’m not an expert but i cannot see how they are sharia-compliant
In Zoya, is VISA sharia-compliant with 0.00% non-compliant / 0.00% questionable / 100% compliant

it’s simply surreal

Can ZOYA-Team please double check and explain to us why they list such companies as sharia-compliant?

#4

Hey @zern welcome to the community! I also really appreciate you splitting your initial post into separate discussions.

This is a common misconception but definitely worth asking about.

Based on our research, Visa and Mastercard are both simply payment processing companies. If you dig further into their latest 10-K reports, you’ll find the following text:

Mastercard

"We do not issue cards, extend credit, determine or receive revenue from interest rates or other fees charged to account holders by issuers, or establish the rates charged by acquirers in connection with merchants’ acceptance of our products.”Source

Visa

“Our net revenues are primarily generated from payments volume on Visa products for purchased goods and services, as well as the number of transactions processed on our network. We do not earn revenues from, or bear credit risk with respect to, interest or fees paid by account holders on Visa products. Our issuing clients have the responsibility for issuing cards and other payment products and determining the interest rates and fees paid by account holders. ”Source

Hope that helps.

1 Like
#5

As-salamu Alaykum Wa Rahmaa Tu’lahi Wa Brakatu all,

Apologies in reviving an old thread.

I am very split on this:

I understand V and MA do not receive interest from transaction

There is a hadith in the following that says

“Muslim (1598) narrated that Jaabir said: The Messenger of Allah (blessings and peace of Allah be upon him) cursed the one who consumes riba and the one who pays it, the one who writes it down and the two who witness it, and he said: they are all the same.”

Wouldn’t V and MA be under the writing and witnessing of riba?

Jazakhalla khairan

#6

You raise a valid point. Ultimately, where one draws the line is an individual decision. Shariah standards provide guidelines for baseline permissibility, which payment processors like Visa and Mastercard technically meet. However, as an individual investor, you can choose to apply even stricter personal guidelines beyond that baseline.

Allah knows best!

#7

Jazakhalla khairan Saad,

I unfortunately could not justify V or MA from the above hadith as they are classed as riba facilitators.

I have removed them from my holdings.

As-salamu Alaykum.