Question: Assalamualaikum Ustadh, Please is POS Business allow in lslamic Business Law?

Answered by Sheikh Sa'eed Hamzah (Lagos)


Wa alaykum salaam warahmatullaah wabarakaatuh 

The POS transactions are of three:

1) Wakaalah: when someone brings you money to transfer to another account on his behalf. You are free to charge him as much as you want for the agency. The money given to you can be transferred or from your account. 

2) Qard: someone collects a certain amount of money from you which he returns later in cash or from his debit card. You have no right to benefit from it, that is no target profit . Lending and borrowing is not a business of profit rather is an assistance of relief therefore it is haraam to charge above the necessary service charge.

3) Sarf: someone gives you his debit card to deduct a certain amount for you to give him cash. The exchange must be instant and on the equal amount except it involves two different currencies. 

Scenario A: 

Someone needs cash of #5000 which you have to deduct from his account, don't give him until you are sure of the deduction which must be exactly the #5000 plus the necessary service charge not profit. 

Scenario B :

Someone comes with $100 any you are to transfer the equivalent in Naira to him. You are free to buy on any amount of your choice as far as the dollar owner agrees with the price, only that the transfer must be done and received before you collect the dollar from him. 

So if it the POS is cooperated as above then it is halaal compliant . But that is not the way it is operated especially the qard ( borrowing ) aspect.

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