It is a well-known fact that the gates Foundation run by Bill Gates and his wife Melinda Gates use majority of their earnings for charity and other welfare programmes. Today, the Gates Foundation announced an open source digital payments platform with the name Mojaloop. Mojoloop is a platform where different companies can create their very own digital payments platform at a large scale. All these digital payment platforms are going to be secure and will help the banks all over the world, as well as the developers and the mobile network careers for developing even more secure online payment systems. One of the best examples of this is M-Pesa based in Kenya.
Kosta Peric, the Deputy Director of the financial services for the poor, working at the Gates Foundation said at the SWIFT Sibos conference held in Toronto that, “ Systems like M-Pesa are great, but most are closed loop.” The success story of M-Pesa is pretty strong and it has helped more than 194,000 people to come out of extreme poverty after their access to the M-Pesa mobile money platform. With the help of this platform, people are able to use their money efficiently and save a major portion of it effectively. However, one big problem with M-Pesa is that the users can send the money or pay an amount only to those users who are available on M-Pesa system as well.
After looking at the challenges faced by such companies in taking their services to almost all the people including those who are poor or does not have a bank account, the Gates Foundation got to know to main reason causing this problem.
Peric said, “First, growth is being slowed by a lack of interoperability—the ability for customers to transact with any other customer, whether they use the same service or not. Second, the reason services aren’t interoperable is because every provider is more or less going it alone. They have no shared platform or technology to help them get off the ground, leaving them no choice but to build their own, independent of and incompatible with everyone else’s”.
Mojaloop Comes as an interoperable platform which is more or less like the Internet but focused specifically on the digital payments. It is free of cost for all the developers, financial service providers as well as the banks.
Most of the online digital payment systems available right now offer their services at a high cost. This is the reason why the poor people are not able to avail these services. Coming up with a low-cost technology including all the common features is a big challenge for private sector companies. Instead, almost all of these business models are developed with profits in mind.
On the other hand, the only profit that Gates foundation is looking for is less poor people in the world. The gates foundation worked with the Fintech developers like Crosslake Technologies, Dwolla, Ripple etc. to come up with Mojaloop. They also said that the first model of the platform will help in extending the interoperability from the mobile platform to any bank, government institution, or any merchant in such a way that it specifically needs the requirements of the poor.
For developers, the new Mojaloop software is available on GitHub. So, if you are a developer, you can take the code and play around with it and its different layers that include, interoperability layer (connection between the bank account, the money wallet and the merchants), the service layer (for identifying the accounts on both sides of the transaction), and the transaction settlement layer (containing payment options and other components to prevent frauds).