The Question
Question:
Assalamu Alaikum, Sheikh. May Allah reward you
abundantly.
I have a question concerning cashback offered by mobile banking applications and digital wallets such as OPay. What is the Islamic ruling on the money they give customers as cashback? Is it permissible to receive and use it?
The Answer
Wa Alaikumussalam wa Rahmatullahi wa
Barakatuh.
The Islamic ruling on cashback offered by mobile
banking applications and digital wallets such as OPay depends on the nature of
the promotion, why the money is given, and the terms and conditions attached to
it.
It is therefore important to distinguish between
cashback offered as a discount or promotional reward and additional money tied
to a loan or deposit arrangement.
1. Cashback Given for Purchases and Payments
Suppose a mobile banking application announces
that customers who purchase goods, pay bills, buy airtime, or make eligible
transactions through its platform will receive 5% or 10% cashback.
If the cashback is genuinely a promotional
discount or a voluntary reward for using the service, and it is not an agreed
benefit attached to a loan, it is generally permissible, provided the
underlying transaction is halal and the promotion does not involve another
prohibited element.
For example, if someone purchases goods worth
₦100,000 and receives ₦5,000 back under a legitimate promotional offer, the
cashback may be treated as a discount or commercial incentive.
The mere fact that a financial service provider
gives a customer additional money does not automatically make that money riba
(interest).
2. Cashback Given as a Gift or Promotional
Reward
Some financial service providers offer rewards to
encourage customers to use their applications. Depending on the actual
arrangement, such rewards may be treated as a gift (hibah) or a
promotional benefit.
Where the reward is genuinely independent of a
loan and does not constitute a prohibited contractual benefit, receiving it is
generally permissible.
However, the label “cashback” is not enough to
determine the ruling. The actual terms of the offer must be examined.
3. Cashback Linked to Depositing or Keeping
Money in an Account
A different ruling may apply when a company
offers additional money specifically because a customer deposits or keeps money
in an account.
In some arrangements, money deposited into a
wallet or account may be treated, in Islamic commercial jurisprudence, as a
loan to the service provider. If the provider guarantees an additional benefit
to the customer as a condition of that loan, the arrangement may fall under the
prohibition of riba.
For example, if a promotion states that a
customer must deposit a specified amount and will receive a guaranteed
additional sum specifically in return for making that deposit, the arrangement
requires careful examination.
Nevertheless, not every reward associated with an
account balance is automatically interest. The contractual structure, the
nature of the account, and the conditions governing the reward all matter.
For this reason, a person should not assume that
every deposit-related promotion is permissible or that every one is prohibited
without examining the actual terms.
4. What Does the Qur'an Say About Riba?
Allah says:
Arabic:
وَأَحَلَّ
اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا
Transliteration:
Wa ahallallāhul-bayʿa wa harramar-ribā.
English translation:
“But Allah has permitted trade and has forbidden
interest.”
— Qur'an 2:275
This verse establishes the prohibition of riba.
However, determining whether a particular cashback offer constitutes riba
requires examining the underlying financial arrangement rather than relying on
the name given to the payment.
5. What Should an OPay Customer Do?
Before accepting a cashback reward, consider the
following questions:
·
Is the reward given for
making a purchase, paying a bill, transferring money, or using a service?
·
Is it a promotional
discount or gift, or is it specifically guaranteed in exchange for depositing
or lending money?
·
Are there contractual
conditions that make the reward a benefit attached to a loan?
·
Does the transaction itself
involve any prohibited activity?
If the cashback is a legitimate promotional
reward for a halal purchase or service, it is generally permissible.
If it is explicitly tied to a loan or deposit
arrangement in a way that guarantees a prohibited benefit, it should be
avoided.
If the terms are unclear, ask a qualified Islamic
finance scholar to examine the specific promotion before deciding.
Conclusion
Cashback offered by OPay and similar mobile
banking applications cannot be declared universally halal or haram without
examining the particular arrangement.
Cashback given as a legitimate discount or
promotional reward for purchases and eligible services is generally
permissible, provided the transaction is halal and no prohibited condition is
involved.
However, an additional benefit guaranteed in
connection with a loan may constitute riba. Deposit-related rewards
therefore require careful examination of their actual terms.
The key consideration is not simply
whether the payment is called cashback, but why it is given and what
contractual arrangement governs it.
May Allah grant us lawful provision, beneficial
knowledge, and the ability to distinguish between what is permissible and what
is prohibited.
Wallāhu Taʿālā Aʿlam — And Allah knows
best.
Zauren Fatawoyi Bisa Alƙur’ani da Sunnah.
WALLAHU A'ALAM.
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