Is the PayPal Working Capital scheme shariah compliant?

Q: Please could you have a look at the new scheme from PayPal called ‘PayPal Working Capital’ and let me know if it’s permissible, I have had a few people ask me and after looking at it, the scheme looks promising, but my limited knowledge cannot determine if it is indeed Sharia compliant? 

الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب


A:  According to the information provided at the links given in the question, the PayPal Working Capital scheme is simply a loan that is repayable with an increment determined by the business’s PayPal sales and account history, the cash advance amount and the repayment percentage selected by the account holder.  What is described as a ‘single, fixed fee’ is in fact riba, and as such, it is a usurious loan and undoubtedly not sharia compliant.


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