The Bill & Melinda Gates Foundation has released a new open-source software for creating payment platforms that will help unbanked people around the world access digital financial services. The software is designed to provide a reference model for payment interoperability between banks and other providers across a country’s economy.
It is available now, free-of-cost, for software developers to adapt and banks, financial service providers and companies to implement. Information on the code can be found at mojaloop.io.
Deputy Director, Financial Services for the Poor, at the Gates Foundation, Kosta Peric said “
Current data from the World Bank shows that nearly two billion people in developing economies lack bank accounts and miss out on the benefits and security that basic financial services provide. Digital financial services, such as mobile money on cell phones, have rapidly expanded over the last two decades because they are convenient for users and cost-effective for companies aiming to serve new markets.”
Continuing, Peric said “ In Kenya, an estimated 194,000 households have moved out of extreme poverty due in part to their access to M-Pesa,a mobile money platform, and users’ ability to save money more effectively. Digital financial services are now available in nearly 100 countries according to GSMA, an organization representing mobile network operators. However, global expansion of these services—especially to the world’s poor—has been hampered, in large part, by a lack of interoperability between digital financial services and payment platforms.”
The new software, called Mojaloop, establishes a blue print for connecting today’s financial services sector, and can be used as a solution to barriers that banks and providers seeking interoperability have traditionally faced. Delivering financial services to the poor is prohibitively challenging for many businesses because they struggle to invest adequately in complex technology while maintaining a commitment to low-cost, inclusive services. This has led to a prevalence of consumer payment options that are out of reach for many people in developing economies, or which limit customers’ ability to transact across products, banks and borders. These and similar challenges have dissuaded many companies from expanding into developing markets altogether.
“Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome. With Mojaloop, our technology partners have finally achieved a solution that can apply to any service, and we invite banks and the payments industry to explore and test this tool,” said Peric,
“Just as the internet revolutionized digital communication, open-source solutions like Mojaloop can spark innovation and democratize access to digital payments, empowering billions of new customers and driving massive economic growth in developing markets” Peric added.
“Interoperability is necessary both for financial inclusion and market maturity, but it is a complex thing to achieve,” said Benno Ndulu, Governor of the Bank of Tanzania, the country’s national bank. “We are excited to explore implementation of this because of how it can simplify that capability for businesses and governments, and speed up access to financial services.”
“As we modernize and develop national and cross-border payments infrastructure in Africa, the only way to sustainably reach and serve the world’s unbanked communities is through new technologies,” said Chris Hamilton, CEO of Bankserv Africa. “Our aim as an organization is to offer national payments platforms for the next generation of financial innovators and Mojaloopgives us some tantalizing new options for doing that in a way that integrates with the entire national economy.”