Mojaloop Foundation

About

Nearly two billion Africans do not have access to banking services and have the lowest amount of savings in the world. ¹ Mojaloop is meant to act as the “financial internet”⁵ to provide secure, safe, digital transactions. It plans to eliminate expensive and allegedly corrupt intermediaries that are part of a large network of non-profits and government agencies involved in personal finance on the African continent. ⁶ Mojaloop is a part of the “give people cash” movement that allows individuals to receive aid directly from givers. ²

The Mojaloop Foundation’s open source software package intends to enable mobile access to digital banking with one network. This single ecosystem is unique for an environment traditionally required to connect to many disparate transaction processing networks, each component charging users a fee for service. Mojaloop eliminates the need for these third-party cross-connections, and the associated transaction fees that currently make mobile transactions unaffordable in third world markets. ⁷

Mobile phones were adopted as the vehicle for Mojaloop as they are typically the only available technology in undeveloped countries to provide the poor an opportunity to have banking services like savings, secure payments, and secure deposits. Mojaloop software acts as the intermediary between the individual cellphones, financial institutions, merchants, charities, and the rest of the digital world. The users can purchase products with their mobile phone, send money to whomever they choose, and Mojaloop will connect and navigate the variety of networks to complete the transaction. The open-source software is available for any network provider to adapt to their own financial network needs. ⁷

Level One Project

The Level One Project created the Mojaloop Foundation and was founded by the Bill and Melinda Gates Foundation. It was launched to alleviate the inaccessibility to modern financial systems by roughly 2.5 billion people around the world. The Level One Project published a report in which it shared that the majority of these people live off less than $2 a day and subsist almost entirely on a cash system. It proposed creating an open source network that would create a low cost, easily accessible, secure connection for these users. ⁸

Technology Backbone

Mojaloop’s software is available through GitHub, Microsoft’s software center. The software serves as a blueprint for mobile digital payments to eliminate complexity that will facilitate widespread adoption of the technology and ease ubiquitous access to digital transactions. It comprises three elements. First, a directory used to identify account holders, then a system that routes payments, and finally a layer for settlement that transfers users’ funds between banks. ⁹

Implementing this sort of system requires additional support that the Mojaloop Foundation supplies. It provides training to staff, consulting on regulatory compliance, and ensuring the accessibility of the technology to users. ⁹

Implementations

Orange, a French mobile phone operator, implemented a mobile payment solution on Mojaloop that may reach 100 million users in 22 African countries. ¹⁰

Tanzania will implement a Mojaloop solution to connect 35 million adults in 2020. ¹¹

Capabilities

The Mojaloop Foundation software solution offers these capabilities:

• Merchant Request – users can request and accept money directly from other users.
• Multi-country/multi-currency – Mojaloop will act as a currency exchange across borders, disseminating and receiving monies at the proper exchange rates.
• Credit Checks – Users can run a credit check on other users in partnership with digital credit companies like Jumo.

Ssnapp: Allowing a multi-payment option where users can contribute to a single purchase like a gift. ¹²

Partners

While the Bill & Melinda Gates Foundation was the prime vehicle for the creation of Mojaloop, a broader ecosystem of technology firms and foundations were involved to fully develop the endeavor.

Technology firms like Coil, Ripple, Crosslake, ModusBox, and Dwolla participated in Mojaloop’s development. Other companies created an application protocol interface (API) that allows the interoperability of mobile transactions between other networks and institutions. Those groups include Telepin, Mahindra Comiva, Ericcson, and the controversial Chinese firm Huawei. ¹³

Sponsoring Entities

Tech companies including Ripple, Coil, ModusBox, and Google, as well as nonprofits like the Bill & Melinda Gates Foundation, and The Rockefeller Foundation, as well as the Monetary Authority of Singapore are listed as sponsoring members. ¹⁴ Though it is not listed as a sponsor member alongside the others, articles on the Mojaloop Foundation website have identified the Omidyar Network as a sponsor member as well. ¹⁵

The left-of-center Rockefeller Foundation is a supporter of Mojaloop and cites solar systems as an example of how digital banking will work in developing countries. The solar operators will charge Mojaloop users for energy depending upon what their budget allows. ¹¹