KUALA LUMPUR, Aug 23 — Shopping, rewards, and payments platform ShopBack and payment gateway, PayHalal, have entered into a strategic partnership to offer Shariah-compliant merchant acquiring services to offer shoppers with buy-now-pay-later (BNPL) solutions.

Under the partnership, merchants and brands enter a Wakalah service contract with PayHalal, enabling their customers to make payments through ShopBack’s app via a deferred payment scheme facilitated by PayHalal's payment gateway.

The gateway supports a range of payment methods including ShopBack PayLater.

It offers merchants and brands the convenience to extend interest-free instalment payments to their customers.

According to a report by Fortune Business Insights, the global BNPL market is projected to grow at a 22 per cent compound annual growth rate and reach US$122.19 billion (RM568.67 billion) by 2030.

Another survey found nearly 60 per cent of consumers prefer BNPL over credit cards, citing reasons such as the ease of set payments, the simple approval process, and the absence of interest fees.

According to ShopBack partnerships head Arvin Singh, the partnership allows both parties to tap into the expanding Islamic market segment, while ensuring the transactions with merchants and brands are aligned with the values and principles of Islamic finance.

Echoing similar sentiment PayHalal chief operating officer Indrawathi Selvarajah said the firm is delighted to collaborate with ShopBack to provide Shariah-compliant merchant acquiring services.

"By combining our expertise, we aim to meet the growing demand for BNPL solutions in the Islamic market, providing customers with a responsible and convenient payment option while supporting merchants in their business growth.”

Both PayHalal and ShopBack are among the nominees of Fintech Frontiers Awards Malaysia, and the public can cast their vote over here.