by Paula Hunter on August 17, 2020
Providers trying to reach developing markets with innovative, low-cost digital financial services are challenged with the cost and complexity of building everything on their own. These proprietary systems raise costs and segregate services from each other, leaving many excluded. Mojaloop can be used as a foundation to help build interoperable platforms, lower costs for providers, accelerate deployment and enable the integration of financial services with others in the market.
The basic idea behind Mojaloop is to connect multiple digital financial services providers together into a competitive and interoperable network, maximizing opportunities for the underserved and enable them to access financial services with low or no fees. Whereas closed-loop proprietary systems shut out new players and keep existing players in isolated subnetworks, Mojaloop provides an open-loop solution that connects all.
Developers at fintech and financial services companies can use the Mojaloop code in three ways: they can adapt the code to the financial services requirements of a particular country, use the software to update their own products and services or create new ones, or improve Mojaloop by proposing updates and new versions of it for other users.
What Mojaloop Is, What it Isn’t
To better understand what Mojaloop is, it is important to understand what Mojaloop is not. Mojaloop is not a payment company, nor a fully-functioning payment system. A payment system requires operations, rules, regulations, legal structure, a business case, and a whole lot more. Those elements are absolutely critical to a successful deployment, and the purpose of Mojaloop is to provide a team building a payment system with the greatest flexibility to adapt the code to their local market. Mojaloop is not a mobile money system; rather it is a reference design for an interoperable payments model that connects real-time payments systems and mobile money systems. Mojaloop is not a customer-facing app and can ‘t be download from an app store. Mojaloop is not fully functional by design. You can’t just download and start running a production level payment switch on the same day.
Yet, using Mojaloop as the reference model for real-time payment system design means that each payment switch can be customized to be different meet different configurations and different infrastructure needs. For example, Mojaloop can be used to design payments models for a wide range of digital financial services including:
Examples of How Mojaloop Can Be Used
A central bank may commission the use of the software by its commercial partners to speed up the
deployment of a national payments gateway.
A major payments processor can use the software to modernize its current offering to achieve lower transaction costs without major R&D investment.
A fintech startup can use the code to connect their offerings into a competitive and interoperable network.
A bank can use the code to modify its internal systems so that it can easily interoperate with other payments providers.
Connect and Learn More
Join the Mojaloop Foundation and help us achieve our financial inclusion mission. Mojaloop open source software, its collaboration community and convenings will continue to serve as a path forward for organizations creating interoperable payments platforms to connect all digital financial providers and customers within an economy. We encourage organizations interested in our mission of financial inclusion to join the Mojaloop Foundation.