Evaluating the Compliance of Shopee Paylater and Shopee Paypinjam with Islamic Finance Principles: Ethical Challenges and Opportunities in Fintech

Abstract

This study analyzes the operational mechanisms of Shopee Paylater and Shopee Paypinjam to evaluate their compliance with Islamic finance principles. The research aims to address critical concerns regarding interest rates, late fees, and transparency, which challenge adherence to Sharia ethics. A qualitative approach was employed, utilizing case studies and semi-structured interviews with users, supported by secondary data analysis. Findings reveal significant non-compliance with Islamic finance principles due to the imposition of interest and late payment penalties, both considered forms of riba. Furthermore, ambiguous repayment terms and hidden fees undermine the clarity and fairness central to Islamic financial practices. The study highlights that while these fintech services offer convenience and accessibility, they fail to align with the ethical requirements valued by Muslim consumers. The research contributes to the understanding of fintech’s role in Islamic markets, emphasizing the need for profit-sharing models, enhanced transparency, and Sharia-compliant regulatory frameworks. These findings have practical implications for fintech providers aiming to design ethical financial products, as well as policymakers and Sharia boards seeking to foster trust and inclusion in digital financial ecosystems. Future studies are encouraged to explore comparative analyses across regions and the perspectives of diverse stakeholders.