Deriving Halal Transaction Compliance using Weighted Compliance Scorecard (WCS)

Abstract

The Halal transaction is the least studied field in Malaysia. The emergence of different types of fintech instigated a large surge of online transactions, in which transaction between a buyer and a seller becomes vague. Therefore, the operational definitions to negate the permissibility of a transaction needs to be further explored. This study aims to demonstrate and propose a Halal transaction compliance process that can be used to better define a single transaction's permissibility and derive modules to implement the compliance process into fintech-embedded e-commerce. The transaction data required for this study was collected from a payment gateway provider, where the documents involved in the transaction were used to derive a weighted compliance scorecard (WCS) that scores a single transaction's average use and source to derive its permissibility score within a given time frame. The proposed system and compliance scoring method can help understand Halal transactions and their management. In short, effective compliance structuring is key in determining a single transaction's permissibility.