Question:
Is using buy-now-pay-later (BNPL) services Islamically permissible if paid off within the grace period?
Answer:
1. What are BNPL (Buy-Now-Pay-Later) Services?
BNPL services allow customers to purchase goods immediately while delaying full payment. Typically, they offer:
- A short-term repayment period (e.g., 30-90 days).
- No explicit interest if paid within a stated grace period.
- Penalty fees or interest if payments exceed the grace period.
2. Scholarly Consensus (Ijma‘) and Established Opinions
Contemporary Islamic jurisprudential bodies, including AAOIFI and the International Islamic Fiqh Academy, have given clear guidelines:
- Permissible: Credit purchases (bai‘ al-ajal) with a fixed price and defined payment schedule, free of conditional interest or penalties.
- Impermissible: Any deferred-payment contracts explicitly including conditions to pay interest or penalty fees upon delay.
AAOIFI Shariah Standard explicitly states that:
“It is impermissible for a credit sale contract to include a condition stipulating interest or penalties for delayed payment.”
3. Analysis Based on the Sunnah
Prophet Muhammad ﷺ permitted deferred payment sales if the price was clearly specified upfront:
- Evidence:
The Prophet ﷺ bought food on credit with clear, fixed payment terms (Sahih al-Bukhari, Sahih Muslim).
However, conditional interest for delayed payment was strictly prohibited:
- Prophet ﷺ stated clearly: “Whoever sells two sales in one transaction must either sell at a fixed immediate price or a fixed deferred price. If not, it involves riba.”
(Abu Dawud, authenticated as Hasan by scholars like Ibn al-Qayyim and Ibn Hajar)
Final ruling:
The original BNPL agreement explicitly includes conditional interest or penalties upon delay in payment. According to Islamic jurisprudence, agreeing to such a term — even if the buyer fully intends to pay on time — is impermissible because the contract contains a prohibited condition linked to riba (usury).
However, if a person is in a pressing need for a purchase, lacks the full funds at the time, and this situation causes genuine hardship, it may be permissible to use BNPL on the condition that they are confident and certain they will repay in full within the allowed period, before any interest or penalty is triggered.
This is based on the juristic principle:
مَا حُرِّمَ لِغَيْرِهِ تَحْرِيمَ وَسَائِلٌ تُبِيحُهُ الْحَاجَةِ
“What is prohibited as a means (to a prohibited end) may be permitted in cases of need.”
In this context, the prohibition is due to the presence of a conditional interest clause — a means to riba — but if the payment is made on time, that prohibited outcome never occurs. Therefore, in situations of genuine need and with high certainty of timely repayment, such an arrangement can be permissible.
Wallahu Alaam