E-Wallet: A Study On Contracts Involved Within Its Operational Mechanism

Abstract

The use of digital wallet or also known as e-wallet is widely spreading across world and specifically among Muslim in Malaysia without people actually knowing and understanding the operational mechanism of an e-wallet. Research has shown that the advancements in term of technology that are brought by e-wallet claimed to give a lot of benefits and advantages towards its users. E-wallet have the ability to make transactions easier, faster and quicker than before. The use of e-wallet also creates improvements in payments, portability, and cashless transaction. This study aims to identify the concept of e-wallet in term of its definition, operational mechanism and the contracts that are involved within e-wallet. The main instrument used for data collection was journals, library research and Internet. The construction of the instrument is the result of modification of the instruments that have been used by previous researchers and researchers’ own design based on the objectives to be achieved. The result shows the right concept of an e-wallet based on its definition as electronic money is a payment instrument that contains monetary value that is paid in advance by the user to the e-money issuer. The user of e-money can make payments for purchases of items and services to vendors who offer the e-money as payment. Besides, writer also finds the contracts involved within an e-wallet namely, wadi’ah contract and qardh contract. The results indicate that e-wallet operational mechanism is not contradict and in accordance to Sharia, hence allowed and permissible. However, further research is needed to identify other factors that could strengthen the effectiveness of this study.