Mojaloop was designed to solve the biggest hurdle for digital financial services providers – interoperability – providing a blueprint for high-demand, cross-border payments between regions and countries in ways that meet financial inclusion principles.
While every market brings regulatory and governmental requirement challenges, solving the challenge of designing interoperable payment systems is critically important for financial inclusion efforts to succeed, for several reasons:
Reach: The expanded reach offered by interoperability can have even greater significance for those who are financially excluded or underserved. Within interoperable digital payments platforms, transfers, payments and additional financial services occur seamlessly and as fluidly as cash across providers, including central banks and non-banks as well as nonfinancial firms such as retail networks, NGOs and mobile network operators (MNOs), among others.
Lower cost: Interoperability can potentially lower the costs of building real-time payments systems. By reducing the entry barriers and improving the value proposition of the services, organizations can drive uptake and increase usage across a larger share of the population. Cost-efficiency of payments encourages the availability of services that are most effective for the underserved while reducing the costs of processing a higher volume of payments.
Increased efficiency and inclusion: Interoperability reduces the duplication of services and makes service delivery more efficient. By facilitating cooperation between sector players, interoperability contributes to market access and service reach. In doing this, it addresses some of the barriers that the underserved may face, including high user fees and limited access. Ensuring that measures are in place to ensure the safety of the system will ultimately build safety and trust in digital financial services and transactions as the medium of exchange.