Already home to a handful of non-interest buy-now-pay-later (BNPL) fintech start-ups, Malaysia has now welcomed its first officially Shariah-certified BNPL platform.
The BNPL operator is Split, a Malaysian-Singaporean start-up, which has over 600 brands in its portfolio. It differentiates itself from other BNPL providers by not monetizing from late fees or other charges that are conditional upon users missing payments. Its revenue model is one where merchants are charged a percentage success fee for every order processed by Split. The non-interest element of BNPL generally aligns with Islamic principles.
Investing in an official Shariah compliance certification, however, is strategic for Split which sees the value of localizing its offering to cater to the Muslim-majority Malaysian market.
“We want our BNPL service to be accessible to all, which in Malaysia, includes a large population of Muslims,” Split Co-Founder and CEO Dylan Tan shared. “We are delighted to announce this certification as it provides our merchants and users the confidence and comfort knowing that they are choosing a BNPL option that is operated in accordance with their religious beliefs.”
Split’s offering was reviewed and is vouched for by Masryef Advisory.
Widely embraced in many developed markets, the BNPL model has gained serious momentum in Muslim markets particularly over the last year amid the novel coronavirus pandemic. Several start-ups such as Tabby and Tamara in Saudi Arabia also secured Fatwas as a strategic move to appeal to the faith-driven.