by Paula Hunter on January 20, 2021
Digital payments are the connective tissue that drives economies. Based on a growing body of evidence, they are a gateway to the financial services that buffer people from risk and allow them to take advantage of economic opportunities. According to the World Bank’s Global Findex 1.7 billion people still lack access to digital financial services, despite mobile money services emerging in nearly 100 countries. Increasing access to digital financial services is critical to accelerating the rate at which the financially excluded move into the formal financial system and hold on to the gains they have made, especially in developing economies.
Increasingly, interoperability is recognized as an essential market condition for financial inclusion. However, the high cost of investing in shared and open infrastructure to achieve true interoperability at scale has slowed the development of inclusive payment models. Mojaloop serves as a blueprint for how to simplify and reduce the cost of payment interoperability so that banks and other providers can develop tools that meet the needs of emerging markets and the unbanked.
Solving the interoperability challenge between digital financial services and payment platforms is large and will help more players looking for ways to develop and implement inclusive payments systems that loop in everyone. If widely adopted, interoperable digital financial services could provide more of the population with access to important financial tools, while adding $3.7 trillion to emerging countries’ GDP by 2025, according to McKinsey Global Institute.
Closing the financial inclusion gap is important to the digital financial services provider (DFSP) ecosystem. Banks, government offices, NGOs, merchants, mobile network operators, national payment providers, regulatory bodies, technology companies, and other players are looking for ways to develop and implement inclusive, interoperable digital payments systems that are accessible to all.
Discover how Mojaloop ties into the larger initiative of financial inclusion and ways you can be part of the solution. Read the rest of our One Loop for All blog series:
- Driving Financial Inclusion Through Interoperable Payments Platforms
- Turning the Underserved into the Newly Served
- Making Digital Financial Services More Affordable and Accessible
- How Digital Financial Services Benefit from Open Source
- Why COVID-19 Spotlights the Need for Inclusive Payment Models
Mojaloop is reliant on its community of supporters, contributors, evangelists, developers, and others to make our work possible and help achieve the Foundation’s mission of providing universal financial inclusion to all. Learn more about how you can get involved in the community and make an impact.
About the Author
Paula Hunter, Executive Director, Mojaloop Foundation
Paula Hunter manages the day-to-day affairs of the Mojaloop Foundation with responsibility for strategic planning and direction, membership development, budgeting, evangelism for the Foundation and its mission, and outreach to strategic partners.