Financial Transfers via Electronic Wallets: Jawwal Pay as a Case Study

Abstract

This study aimed to clarify the juristic (fiqh-based) characterization of financial transfers conducted through electronic wallets via modern digital payment applications, by adopting Jawwal Pay as an applied model within the Palestinian context, in light of the increasing use of such tools in daily financial transactions. The study employed the descriptive approach to present the concept of digital wallets and their operational mechanisms, the analytical approach to examine juristic texts related to financial transfers and their associated contracts, and the comparative approach through reviewing and discussing the opinions of contemporary jurists and identifying the most preponderant juristic view based on Sharia evidence. The study concluded that financial transfers through electronic wallets are, in principle, juristically characterized as a contract of hawala (debt transfer), and may, in certain practical forms, be accompanied by an agency (wakalah) contract. It also found that the commissions imposed on these services are Sharia-compliant if they are charged in return for an actual and specified service and are not linked to a loan or to delayed repayment, in order to avoid any suspicion of riba (usury). Furthermore, the study indicated that the use of digital wallets contributes to facilitating financial transfers and reducing operational costs, despite the potential technical and security risks associated with them. The study recommended enhancing users’ Sharia awareness regarding the nature of transactions executed through digital wallets, establishing clear regulatory guidelines for commissions imposed on transfer operations, and improving technical infrastructure to ensure the security of financial data and transactions. The originality of this study lies in addressing a contemporary issue that integrates digital financial applications with Islamic legal rulings through an applied juristic analysis of a realistic local model, thereby linking technological developments with the fiqh principles governing financial transactions.