How to offer interest-free installments to customers — using the Islamic Murabaha model, compliant with PSD2 and AAOIFI.
BNPL market by 2030
interest for the buyer
compliant
Interest-free installments — via a "cost-plus-markup" model approved by Shariah boards.
The platform purchases goods from the seller at the base price, then resells to the buyer with a fixed markup in installments. No interest — it's a trade transaction.
In Islamic finance, charging interest (riba) is prohibited. Murabaha is not a loan — it's a trade deal with deferred payment, approved by AAOIFI.
The Murabaha model is fully compliant with European payment services regulation. A BNPL operator can operate in the EU with the appropriate license.
Two-phase transactions and split payments for BNPL operations.
Hold/commit model: funds are reserved on the buyer's account and charged according to the installment schedule. Full control over every payment.
Configurable schedules: 3, 6, or 12 payments. Automatic charges on schedule, with reminders 3 days before each payment.
Built-in anti-fraud rules for creditworthiness assessment: transaction history, amount limits, and document verification.
The Murabaha model originated in Islamic finance, but today it attracts attention well beyond the Muslim world. The reason is simple: buyers don't want to pay interest. The rise of BNPL services like Klarna, Afterpay, and Tabby has shown that interest-free installments are in mass demand. Murabaha offers a legally sound model to meet that demand.
Technically, implementing Murabaha through a payment platform requires two key capabilities: two-phase transactions (hold + scheduled commit) and automatic fund distribution between the seller and the BNPL operator (split payments). 4Pay.online supports both mechanisms out of the box, enabling you to launch a BNPL service without building payment infrastructure from scratch.
The Islamic finance market is valued at $4 trillion and growing at 10–12% annually. At the same time, digital Islamic financial products remain underrepresented: most Islamic banks run on legacy core banking systems with no API or mobile apps. For a fintech team, this is a window of opportunity: offer Murabaha installments as a digital product — with an API, a mobile app, and instant approval.
Three setup wizards in the management console. The operator completes them without development work.
Available products, regulatory regime and the Sharia board precondition for profit-sharing products.
Funding source — your own pool or an external BNPL provider; payment plan, purchase limits, approval rules and grace period. In the profit-sharing mode there is no lending interest: the buyer pays a fixed price with a markup known before the deal.
The terminal where the installment is offered to the buyer and the outlet's share of its cost.
The platform maintains the payment schedule, balances and arrears for every installment itself. Penalties are unavailable in the profit-sharing mode: arrears are handled with reminders and product suspension.
Murabaha installments via API — compliant with Shariah and European regulation.
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