Bill & Melinda Gates Foundation releases new open-source software for the unbanked that utilizes technology developed by distributed ledger startup Ripple.
Thus, the new software, called Mojaloop, aims at providing an interoperability layer between financial institutions, payment providers and other firms that offer such services to the poor and unbanked. In its turn, Ripple's Interledger protocol, which is used to transact between different financial networks, is being used to help accomplish that goal.
Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome. With Mojaloop, our technology partners have finally achieved a solution that can apply to any service, and we invite banks and the payments industry to explore and test this tool. Just as the internet revolutionized digital communication, open-source solutions like Mojaloop can spark innovation and democratize access to digital payments, empowering billions of new customers and driving massive economic growth in developing markets.
Deputy Director, Financial Services for the Poor, at the Gates Foundation
As reported, in addition to Ripple, other financial technology firms participate in the development of the software: Dwolla, ModusBox, Crosslake Technologies and Software Group.
As we modernize and develop national and cross-border payments infrastructure in Africa, the only way to sustainably reach and serve the world’s unbanked communities is through new technologies. Our aim as an organization is to offer national payments platforms for the next generation of financial innovators and Mojaloop gives us some tantalizing new options for doing that in a way that integrates with the entire national economy.
CEO of BankservAfrica
According to the company, the developers can access the new software on GitHub, the world’s leading open-source development platform. The software includes four components: an interoperability layer, which connects bank accounts, mobile money wallets, and merchants in an open loop; a directory service layer, which navigates the different methods that providers use to identify accounts on each side of a transaction; a transactions settlement layer, which makes payments instant and irrevocable; and, components which protect against fraud.
The software is not to be owned or implemented by the Gates Foundation: it will be used in the foundation’s ongoing work to promote the development of pro-poor, digital payment platforms.