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The need for e-business study from Islamic perspectives has been disregarded by previous studies. In view of the studies, most of the studies interested to investigate e-banking acceptances, however the study of Islamic e-business is still limited. In Malaysia, the study of Islamic e-business is also scarce. Say for instance Guriting and Ndubisi, Sulaiman et al. Ramayah et al and Guru et al. have investigated e-business from banking point of view. Still, none of these studies tried to study Islamic e-business specifically. By itself, the study of Islamic e-business is remained inconclusive and provides motivation for the current study to provide a greater picture of Islamic e-business by conducting a research. E-business is a growing application that needs to be given a proper attention by Muslim businesses.

In this study, Islamic e-business is introduced. E-business is defined as the practice of performing and coordinating critical business processes through the extensive use of computer and communication technologies and computerized data. As such, Islamic e-business is the practice of performing and coordinating critical business processes through the use of computer and other technologies that to better reflect the Islamic point of view. Indeed, Islamic e-business can also be defined as using electronic facilities in order to conduct business transactions electronically.

In view of the definitions as above, Islamic e-business provides a number of benefits to those who are using it. First, it offers convenience of doing business transactions since it has 24 hours operation. Second it offers quicker ways of doing business transactions as it also complements the traditional way of doing business transactions. Third, Islamic e-business is also important as it promotes economies of scale among businessmen. Indeed, a transaction per se, will consider expensive, but however the introduction of Islamic e-business (as similar to that of e-business counterpart), will enable to benefits of those businessmen. Islamic e-business, thus, is able to reduce a transaction cost, as the size for the transaction is elevated.

In this study, the term homoIslamicus and homoeconomicus are also introduced. Homeislamicus refers to “Islamic man” and homoeconomicus refers to “economy man”. As far as homoIslamicus is concerned, e-business provides a means to sell products and services electronically to an end customer. In this study, the characteristics of Islamic e-business are introduced, among others, are as follows:

1. Universal business→Islamic e-business provides a better look of e-business from Islamic viewpoint. It covers all layers of aspects in business that permissible in Islam;

2. Free-gharar→The term gharar refers as uncertainty. Islamic e-business ensures business transactions that are clean and free from ambiguity in which they are prohibited in the religion of Islam;

3. Shariah compliant transactions→Islamic e-business allows the transactions for any types of businesses that consistent with the law of Islam, namely Shariah;

4. Interest-free transaction→Islamic e-business offers interest-free business transaction. Indeed, mark up is allowed if payment is deferred.

On the basis of the above argument, this paper aims to examine the e-business from Islamic perspectives where at the same time the term Islamic e-business introduced as noted earlier. Explained in more detail, this paper will examine the Islamic e-business, prospects of Islamic e-business and challenges of Islamic e-business in a Malaysia context. This study is using qualitative approach in order to analyze the mentioned topics. All in all, the data employed in this study, will not be of survey based, but it is of thinking from the author in exploring the objectives, through an analytical approach.

The rest of the paper is structured as follows: Section 2 attempts to present an overview of the Islamic e-business. Section 3 is constructed in order to discuss the prospects of Islamic e-business that emerge over time. Section 4 attempts to present the challenges of the Islamic e-business implementation in Malaysia. The last part considers conclusions and research implications.

An overview of Islamic E-Business

By definition, business is defined as an organization that provides goods or services in order to earn profits. Profits in this context are defined as the difference between a business’s revenues and its expenses. E-business describes the use of electronic means and platforms to conduct a company’s business. As discussed by Kotler and Keller  the advent of the Internet has greatly increased the ability of companies to conduct their business faster, more accurately, over a wider range of time and space, at reduced cost and with the ability to customize and personalize customer offerings. In this paper, Islamic e-business stresses on an organization that sells goods or renders services to end customers, but forbids unethical practices such as gambling, deceit and fraud. At the same time, products and services are must be those of halal. Non-halal products and services are not permissible and condemned by the teaching of Islam.

The successful of Islamic e-business depends on four factors. First is the role of homoIslamicus and homoeconomicus. The practice of Islamic e-business must be started of among these people before it can be taken as an exemplary example to whole society. Pursuing Islamic e-business seems to be difficult and is hard to do, if these people are unwilling to attempt to sell their business products or services electronically. Second, the business environment also affects the utilization of Islamic e-business. If the environment stresses in Islamic businesses, as well as the use of e-business as a means of conducting business, therefore there is possibility that Islamic e-business will have a greater acceptance. Third, the rules or regulations must be in line with Shariah Islamiyyah as well as the need of businesses. It is better if the rules or regulations are supportive. Fourth, governments also play a role in encouraging the use of Islamic e-business. It is a plus point to encourage homoIslamicus and homoeconomicus to utilize Islamic e-business by providing a financial and non-financial assistance.

From an Islamic point of view, e-business is accepted for individuals business transactions provided it is conducted according to the Shariah.---Source: arraydev.com