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Can a money transfer be halal? Understand what makes a transfer Sharia-compliant, which services are used in Muslim communities, and how to avoid riba in international payments.
In Islamic finance, a transaction is generally considered halal (permissible) when it avoids riba (interest), gharar (excessive uncertainty), and maysir (gambling). For a simple international money transfer โ sending a fixed amount to a recipient โ the transaction itself is considered permissible by most scholars, as it is a straightforward exchange of value with transparent fees.
Some Islamic finance scholars have examined whether exchange rate markups constitute a form of riba. The majority view is that a fee for currency conversion services โ including a spread โ is permissible as an ijara (service charge), provided the rate is disclosed clearly and the exchange is simultaneous. Hidden or undisclosed markups are more problematic from a transparency perspective.
Several banks operating under Islamic finance principles offer international transfer services: Al Rajhi Bank (Saudi Arabia) provides international transfers with full Sharia compliance oversight. Dubai Islamic Bank and Abu Dhabi Islamic Bank similarly offer international wires. These banks use murabaha and wakala structures rather than interest-bearing mechanisms for liquidity management.
Wise, Remitly, and Western Union are widely used by Muslim communities globally and are generally considered permissible for simple transfers โ they charge service fees rather than interest. Hawala โ a traditional informal transfer network common in South Asia and the Middle East โ is also generally considered halal and remains widely used, though regulation varies by country.
For personal remittances (sending money to family), any reputable money transfer service is generally considered acceptable. Where the question of halal compliance becomes more nuanced is in investment products, credit, and savings accounts โ not in standard transfers. If you have specific concerns, consult a qualified Islamic finance scholar or the Sharia board of your bank.
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