IoT-Driven Payment Gateways in Fintech: Towards a Shari’ah-Compliant Digital Future

Abstract

The growing integration of the Internet of Things (IoT) within financial technology is giving rise to a new generation of payment gateways capable of executing autonomous transactions with unprecedented speed and accuracy. These IoT-driven systems, ranging from wearable payment devices to smart appliances, are reshaping digital finance; however, this rapid expansion raises significant concerns regarding compliance with Sharīʿah. This study investigates the design and operation of IoT-based payment gateways through the lens of Islamic jurisprudence, aiming to outline a pathway towards a Sharīʿah-compliant digital payment gateway future. It examines how these technologies can be aligned with fundamental Islamic legal requirements, including the clarity of contractual terms, the validity of consent, transparency, and the avoidance of unjust enrichment, etc. A critical theme I     n this evaluation is the pressing need for Islamic states to establish institutional mechanisms capable of defining contemporary Maṣlaḥah in the governance of IoT systems. Without such bodies, the application of Sharīʿah to emerging innovations remains fragmented. Drawing from classical legal theory as well as contemporary fatwā literature, the study proposes a conceptual framework that integrates Islamic moral values with technological innovation. It presents practical guidance to Fintech developers, Islamic financial institutions, Sharīʿah jurists, and regulators. By addressing both the operational functionality of IoT payment systems and their conformity with Sharīʿah principles, this research contributes to the development of an IoT-enabled financial infrastructure that is not only efficient and future-oriented but also rooted in justice, trust, and moral accountability.