What is (Mainly) Stopping Small Halal Businesses from Expanding Globally?

Imagine you’re running a thriving halal business, selling artisanal halal snacks online. Orders start pouring in from countries you never expected—Germany, Australia, and even Japan. You’re excited to expand globally, but then you hit a wall: international payments. Suddenly, your dreams of growing into a global brand feel more like a nightmare as hidden fees, currency fluctuations, and complex regulations eat into your profits.

If this sounds familiar, you’re not alone. The global halal economy, valued at over $5 trillion, offers unparalleled opportunities for businesses to reach Muslim consumers worldwide. Yet, for many halal entrepreneurs, international payments are the biggest stumbling block, often overshadowing other logistical challenges like supply chains and marketing.

Let`s dive into why international payments are such a pain point for halal businesses, explore real-world examples, and outline actionable strategies to overcome them—all while staying true to Shariah principles.

Dig deeper: 50 Small Halal Business Ideas to Start in 2025

The Real Cost of International Payments for Halal Businesses

Consider the case of a modest fashion brand based in Malaysia. They recently started shipping their hijabs to Europe, excited about the demand from Muslim women seeking stylish, halal-compliant options. But here’s what happened:

Every time they paid their suppliers in Turkey or received payments from customers in Germany, they noticed something odd. The numbers didn’t add up. Upon closer inspection, they realized their bank had been adding hidden fees into the exchange rate, costing them thousands of dollars annually. These fees weren’t disclosed upfront, violating the transparency central to Islamic business ethics.

This isn’t an isolated incident. In 2023 alone, small and medium-sized businesses (SMBs) in the U.S. lost an estimated $800 million to hidden fees in international payments. For halal businesses, which often operate on tight profit margins, these losses are not just frustrating—they’re crippling.

Why International Payments Are So Challenging

Halal businesses face unique challenges when managing cross-border transactions:

1. Hidden Fees and Inflated Exchange Rates
   Many payment providers advertise “no fee” or “low-cost” international transfers but conceal fees in marked-up exchange rates. For a halal business, this lack of transparency goes against Shariah principles, which emphasize fairness and clarity.

2. Complex Regulations
   Navigating the financial regulations of multiple countries can be overwhelming. Each country has its own rules for international payments, which can delay transactions and increase costs.

3. Currency Volatility
   Dealing with fluctuating exchange rates can make it difficult to predict costs, affecting cash flow and profitability.

4. Lack of Shariah-Compliant Payment Solutions
   Not all financial service providers offer halal-compliant payment options. For businesses committed to operating ethically, finding the right partner can feel like searching for a needle in a haystack.

How Halal Businesses Can Overcome These Challenges

The good news? These challenges aren’t insurmountable. Here’s how halal businesses can take control of their international payments:

1. Educate Yourself on Hidden Fees
   Always compare the exchange rates offered by your payment provider with the mid-market rate (e.g., the one on Google). If there’s a significant discrepancy, you’re likely being charged hidden fees.

2. Choose Transparent Payment Providers
   Work with providers that disclose all fees upfront and offer halal-compliant solutions. For example, Wise (formerly TransferWise) is known for transparent pricing, and some Islamic financial institutions specialize in Shariah-compliant international payment services.

3. Hedge Against Currency Fluctuations
   Use tools like forward contracts or auto-conversion features to lock in favorable exchange rates. This ensures you’re not caught off guard by sudden currency fluctuations.

4. Leverage Technology
   Blockchain-based payment platforms offer transparency and security, making them a great fit for halal businesses. These platforms allow real-time tracking of payments, ensuring you know exactly where your money is at all times.

Take the example of an Islamic skincare brand based in the UAE. As demand for their halal-certified products grew in Europe and Asia, they struggled with high transaction fees when paying suppliers and receiving customer payments. Instead of relying on traditional banks, they partnered with a local Islamic financial institution.

The bank provided shariah-compliant solutions, including a transparent pricing model and tools to manage currency volatility. This switch not only saved them money but also aligned their financial operations with their core values, enhancing their reputation among Muslim consumers.

Why Transparency Matters for Halal Businesses

Transparency isn’t just a nice-to-have for halal businesses—it’s a necessity. Shariah compliance mandates fairness in all transactions, from pricing to the disclosure of fees. Yet, many international payment providers fall short of these standards.

By choosing partners who prioritize transparency and ethical practices, halal businesses can ensure their operations reflect Islamic values while building trust with customers and suppliers.

How To Empower Halal Businesses Globally?

Addressing the challenges of international payments isn’t just about cutting costs. It’s about enabling halal businesses to thrive in a global marketplace. The $800 million lost annually to hidden fees represents more than just financial losses—it’s a barrier to growth, innovation, and community impact.

By taking a proactive approach to managing international payments, halal entrepreneurs can unlock their full potential. With the right tools, knowledge, and partners, they can expand their reach, grow their profits, and contribute to the vibrant halal economy.

As the halal economy continues to grow, international payments will remain a critical area of focus for businesses looking to expand globally. By addressing these challenges head-on, halal businesses can not only safeguard their bottom line but also uphold the values that set them apart in the global marketplace.

2025 offers an incredible opportunity for halal entrepreneurs to break new ground. With transparency, ethical practices, and innovative solutions at the forefront, the future is bright for halal businesses aiming to make their mark on the world stage.