Nowadays apps and companies provide the facility that you take the item now and pay the price later in three or four instalments; the cash price remains the same, but if there is a delay in any instalment, a penalty (late fee) is imposed. Is shopping through such apps permissible?

Buying on credit and in instalments is in itself permissible, and if at the time of the contract agreement is reached on one specified price, charging a higher price compared to cash is also permissible. The impermissible thing is not the amount of the price, but an increase in return for delay on a debt.

The common form of these apps is that the company pays the price to the shopkeeper and makes the customer a debtor to itself; now what is due from the customer is not the price of the sold item but a debt. The increase that is taken for delay in repaying this debt — late fee or penalty — is explicit interest, and this is that riba of Jahiliyyah concerning whose prohibition the Qur'an was revealed. Allah Almighty says: ﴿وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا﴾ (Allah has permitted trade and has forbidden riba) (Surah al-Baqarah: 275), and He said: ﴿يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا إِنْ كُنْتُمْ مُؤْمِنِينَ﴾ (O you who believe, fear Allah and give up what remains of riba, if you are believers) (Surah al-Baqarah: 278). And the Messenger of Allah, peace and blessings be upon him, cursed the one who consumes riba, the one who gives it, its scribe and both its witnesses (Sahih Muslim: 1598).

- The Permanent Committee (Saudi Arabia) has given the fatwa that the condition of a fixed percentage increase for delay of an instalment is "an invalid condition; because it is riba of Jahiliyyah" (Fatawa al-Lajnah ad-Da'imah, Fatwa No.: 18706). - In another fatwa of the same Permanent Committee (No.: 29998) it is also stated that this increase, even if it is kept to be spent in charity, still remains interest, and buying from shops and companies in whose contracts this condition is included is not permissible even for a person who is confident that he will pay on time, because entering into such a contract is approval of haram. - The decision of the Islamic Fiqh Academy (Majma' al-Fiqh al-Islami, Jeddah) is that if a debtor buyer delays in instalments, it is not permissible to impose upon him any amount in excess of the debt — whether the condition was stipulated beforehand or not — because this is haram interest. It should be clear that a penalty condition (shart jaza'i) can only be in those contracts in which the original obligation is not a debt, for example construction and supply contracts; in the matter of a debt this is interest itself.

The ruling will be applied according to the terms of each app's contract. A contract in which any increase for the company is stipulated for delay — whether its name is late fee, service charge or something else — entering into it is not permissible, even if you are confident that you will always pay on time. And if in some case truly no increase is stipulated for delay, its details should be placed before the scholars and the ruling obtained; the decision will be on the written terms, not on the name and advertisement. Avoiding doubtful contracts is itself religiosity.

Repayment of the original debt is due from him; he should pay it. He should make every lawful effort to avoid paying the interest increase, and repent from and avoid such a contract in the future, because the one who gives interest is also included in the same warning mentioned above in the hadith.

A major objective of the prohibition of interest is the protection of wealth and the prevention of exploitation of the needy and weak. Today this same exploitation is being presented under the beautiful name of "facility"; putting both one's wealth and one's religion at risk in return for a few days of ease is not wisdom.

Translated from the original Urdu fatwa.