Extending EMV to support Murabaha transactions

Conventional credit card transactions are not consistent with Islamic principles, as exemplified by the Islamic banking system and the ‘Murabaha sale’. On the other hand, EMV-compliant IC (Integrated Circuit) cards have been developed to secure traditional Point of Sale (POS) transactions. Thus, if Islamic principles are to be applied to card payments, a new and secure card payment process is required. In this paper, we propose a method for applying Islamic principles to card payments, where EMV IC cards are used to conduct card Murabaha transactions. After introducing the notion of Murabaha sale within the Islamic banking framework, we outline the EMV payment transaction process. Security requirements are then identified for a secure card Murabaha transaction. We then present a possible modification that allows an EMV card to conduct a Murabaha sale transaction. Finally, we analyse how the proposed scheme matches the identified security requirements.