Customers’ Intention towards Shariah Compliant Credit Cards: A Pilot Study

Abstract

The Islamic finance industry continues to grow, and the Islamic banking and finance sector has made further progress in accomplishing a comprehensive Shariah based-contract regulatory framework. It is important to note that Islamic banking is built to meet the demand for Shariah compliant products and services. Furthermore, Islamic banking products, specifically the Islamic credit cards (ICCs), are catered for both Muslims and non-Muslims as alternative financing products. Unfortunately, the customers are having negative perception towards ICCs. They claimed that the products are similar to conventional credit cards (CCCs) and just merely change in terminologies. The awareness level also affected as the product is not widely promoted and marketed, and has caused the ICCs to lose competitive edge as compared to CCCs. Therefore, the purpose of this paper is to investigate individual intention to have Shariah compliant credit cards, and also to examine the factors that influence intention towards Shariah compliant credit cards. The pilot study carried out on quantitative basis by distributing 100 questionnaires in Klang Valley and applying purposive sampling. Data was later undergoing relationship testing using structural equation modelling (SEM-PLS version 3.2.6). This study has developed a model to measure customers’ intention towards Shariah-compliant credit cards (SC-CCs). The objectives of the proposed model are (1) to explore the dimensions of the Theory of Planned Behaviour (TPB) with the integration of Islam Worldview (IWV), (2) to assess the robustness of TPB and IWV with attitude, subjective norm, perceived behavioural control (PBC), religiosity, knowledge and Shariah compliance in influencing customer behaviour intention towards Shariah compliant financing products. The results showed three constructs i.e. attitude, PBC and Shariah compliance are significant with the intention towards Shariah-compliant credit cards. However, subjective norms, religiosity and knowledge are not significant with intention towards Shariah compliant credit cards.This study will contribute to new strategies of promoting and marketing Islamic financial products. By introducing new innovative approaches; highlighting the key features and benefits of Shariah compliance and compare to the conventional products, and change of product names to Shariah compliant instead of Islamic (e.g. Islamic credit cards to Shariah compliant credit cards), Islamic banking and finance will remain robust and competitive in expanding their market shares.