Analysis on the determinant of millennials’ zakat payment through digital platform in Indonesia: a multinomial logistic approach

• Published in: Journal of Islamic marketing 2024-01, Vol.15 (2), p.541-572
• Main Authors: Beik, Irfan Syauqi, Arsyianti, Laily Dwi, Permatasari, Novita
• Format: Article
• Language: English
• Subjects: Banking; Charities; Commercial banks; Digital technology; Empowerment; Internet; Millennials; Mobile commerce; Payment systems; Social networks; Volunteers
• ISSN: 1759-0833; 1759-0833; 1759-0841
• DOI: 10.1108/JIMA-09-2021-0313

Purpose Digital technology has been widely applied in zakat collection. Millennials, who are now dominating the productive phase and at their peak carrier path, are the potential target for zakat collection as their number reached 31.3% of the Indonesian population. On the other hand, public and private zakat institutions have attempted to optimize the country’s zakat potential, reaching 233.6tn rupiahs, through development of a digital platform for zakat collection. However, the gap between the actual collection of zakat with its potential is still large. This study aims to analyse the factors affecting millennials in paying zakat through direct payment or through digital platform of private or public zakat institutions. Design/methodology/approach Multinomial logistic regression method, which signifies the contribution of this study, is used to analyse factors influencing millennials in their zakat payment. In addition, cross-tabulation is used to classify the characteristics of respondents. Respondents are selected conveniently through a digital questionnaire distributed in February–March 2021. Respondents are also selected purposively based on their experience in paying zakat through direct, private or public zakat institutions, which are consisted of 50 respondents per each category; thus, the total becomes 150 respondents. Findings Based on the results, three variables, namely, education, accessibility and age, are found to have a significant influence on zakat payment through online platforms provided by private zakat institutions. Meanwhile, variables that influence zakat payment through online platforms provided by public zakat institutions are education, accessibility and income. This study also finds that millennials have the highest probability to select online platforms provided by private zakat institutions as a channel of their zakat payment. However, the overall result shows that millennials tend to pay directly to the mustahik (zakat recipients) rather than via online platforms, presumably because of their limited zakat literacy. Research limitations/implications The purposive sampling technique used to determine the research samples limits the generalization of the study. Practical implications This paper establishes a new approach in analysing millennials preference in their zakat payment with digital inclusiveness. The use of a multinomial logistic approach, which has not been widely applied in such research, strengthens the analysis th