Q: Is it permissible for a merchant to offer the Payflex payment option to their clients? Similarly, is it permissible for one to use the Payflex payment option when purchasing from a store which offers the Payflex payment option?
Below are the details regarding how the Payflex payment option operates:
A customer wishes to purchase an item costing R2000 from an online store. Instead of paying for the item in full immediately, he has the choice of using Payflex when concluding his purchase.
Payflex allows the customer to split the cost of the purchase into 4 equal, interest-free and fee-free payments. When checking out, the customer completes a quick form and is instantly vetted. Upon Payflex approving the customer’s credit rating, Payflex will immediately pay the merchant in full for the sale at the time when the customer buys the item from the merchant.
The customer will pay Payflex the first 25% of their purchase (R500) at the time of the purchase. Payflex will then collect the other 75% of the amount in three instalments of R500 each over the next six weeks.
Payflex charges the merchant a fixed fee for processing the transaction between the customer and the merchant. Is this transaction permissible in Shariah?