Libya’s Dar Al-Ifta clarifies rules on card payments in retail transactions

Libya’s Dar Al-Ifta has issued a detailed religious ruling clarifying the use of bank cards in commercial transactions, setting out key conditions for both merchants and consumers.

In a statement, the authority confirmed that purchasing goods using bank cards is permissible under Islamic law, provided there is a clear agreement between the buyer and the seller on the price. It added that merchants may charge a higher price for payments made by card compared with cash transactions, as long as both parties agree to the terms.

The ruling also addressed the responsibilities of card-issuing institutions, stating that they should not oblige merchants to apply the same price for both cash and card payments, particularly if they do not provide immediate access to funds when requested. Such conditions, it said, could place an unfair financial burden on traders and reduce the value of their money.

In addition, Dar Al-Ifta indicated that it is not appropriate for banks to impose fees on merchants for processing card payments. Instead, it suggested that such services should be offered as part of standard banking services without additional charges, in order to support the development of the banking sector and encourage wider use of electronic payments.

The statement added that removing such fees would also help prevent additional costs from being passed on to consumers through higher prices.