What are the challenges of creating interoperable, inclusive payment models?

Digital financial services have emerged in nearly 100 countries, but they’re not growing as fast as they could, according to the GSMA. One big reason is the lack of interoperability between different services and transaction platforms, in addition to addressing complex governmental and regulatory requirements. Cooperation between governments and regulatory authorities is essential to establish a safe and effective interoperable payments infrastructure.

Given the complexity of these challenges, companies have struggled to balance the cost of developing complex interoperable systems with the need to keep service fees affordable to the underserved. As a result, customers can transact only with other customers using the same service, while the unbanked need to transact across borders and service providers. Another issue is the prevalence of high-fee service options that are out of reach for many people in developing economies.

Mojaloop, which incorporates the Swahili word for “one,” aims to create a common open-loop solution instead of having multiple, closed-loop systems that have long been prevalent.