Riba and gharar on digital payment applications: comparison between Malaysia and Indonesia

Malaysia and Indonesia have muslim-majority population, encourage the financial sector to provide services that is in line with sharia, including digital payment instruments. This study aims to compare riba and gharar on digital payment applications in Malaysia and Indonesia. This research is normative juridical research with conceptual and comparative approaches. The main part of the focus, first, Securities Commission Malaysia has divided digital currencies into two categories, namely digital currencies based on technology without underlying assets and the ones based on riba goods. For the former currencies, it is categorized as urudh and is not considered a currency from sharia point of view, nor it is a riba commodity. Second, Based on Islamic law, the use of digital payment applications between Malaysia and Indonesia is permissible. Riba issues can occur if the floating funds stored at the service provider are used improperly. Floating funds should not get any additional to avoid riba. Lucky draws and lottery given after doing top-up are riba because of the uncertainty. Digital payments are developing both in Malaysia and Indonesia so this research can provide an overview of the differences between riba and gharar in digital payment instruments in both countries and it’s law