Securing Digital Zakat Transactions from Fraud in a Smart Society: Legal Insights and Recommendations

¹ Faculty of Law, Universitas Muhammadiyah Yogyakarta, Indonesia
² Faculty of Sharia and Law, Universitas Islam Negeri Sunan Kalijaga, Indonesia
³ Council for Religious Opinion and Tajdid, Board of Muhammadiyah Special Branch, Budapest, Hungary

^* Corresponding author: khaeruddin@umy.ac.id

Abstract

Zakat, a fundamental pillar of Islam, serves as a crucial mechanism for wealth redistribution and social justice. In Indonesia, with an estimated annual potential of IDR 327 trillion in 2020, the digitalization of zakat payments has become integral to a smart society. However, the convenience of digital zakat transactions has given rise to concerns about fraudulent activities posing as legitimate charities. This study addresses these challenges by investigating factors contributing to digital zakat fraud in Indonesia. Focusing on limited regulation, cybersecurity vulnerabilities, and the exploitation of religious trust, the research employs a mixedmethods approach. The study uncovers gaps in regulatory frameworks, emphasizing the need for revisions to safeguard personal data within a smart society context. It explores cybersecurity vulnerabilities associated with online platforms, examining their potential impact on data breaches and financial losses. The study delves into the exploitation of religious trust, offering actionable recommendations for regulatory enhancements, cybersecurity measures, and public awareness initiatives. The research advocates for a holistic approach, combining legal reforms, robust cybersecurity, and community education to ensure the integrity of digital zakat transactions, foster trust, and uphold the impact of charitable contributions in the evolving digital zakat ecosystem within a smart society framework.