Digital Frontiers

Ecosystem & Interoperability

ARTICLES

Achieving Development and Acceptance of an Open and Inclusive Digital Payments Infrastructure

This report was developed for financial inclusion policymakers and payment service regulators, this note proposes policy options and practical actions that can help moving toward developing open and inclusive digital payment infrastructures, while also incentivizing the acceptance and use of digital payments.

A Case Study in Interoperable Payments in Myanmar’s Microfinance Industry Part 1, 2 & 3

Modusbox collaborated with UNCDF Myanmar on a six-month-long interoperability project in Myanmar’s microfinance industry to demonstrate the benefits of interoperable, real-time payments for microfinance customers in Myanmar. Part 1: The Challenges Part 2: Standardizing Digital Loan Repayments Part 3: 5 Takeaways for Banks and Regulators

(Un)stacking Financial Market Infrastructure

The biggest challenges in scaling effective financial infrastructures that work for poor people often are not about technology. Instead, they often revolve around questions of ownership, governance, economics, regulation, and political economy. These challenges are not small, but when addressed effectively, a system can emerge that improves the value of financial services for poor people.…

Technology Building Blocks for an Open API Strategy

For financial services providers looking to open APIs, the right combination of people, processes, and technology is essential. Too often, however, business leaders do not engage on key technology considerations, and business strategy is kept separate from technology strategy. This can lead to technically unreliable solutions that require intensive, ongoing technical support and create financial…

How to Engage Third Parties with Your Open APIs

This highlights deck from CGAP aims to drive awareness and use of APIs. It seeks to help DFS providers understand the differing needs of third parties across different segments, identify engagement activities that can address those needs, and start to think about an engagement strategy that is aligned with internal priorities and capacity. It will…

The Scale and Usage of Digital Platform Ecosystems in Nigeria, Kenya and South Africa

Nigeria, Kenya and South Africa are leading digital app markets in Africa. The relatively high levels of app usage across these markets are driven by expanded smartphone penetration, as well as higher levels of access to digital financial services, including mobile money. This series of infographics showcases the data on the size and scale of…

Digital Finance APIs Come with Risks – Here’s One Way to Manage Them

Often an open API initiative starts when a digital financial services (DFS) provider sees the potential for scaling the exposure of services, such as payments, to partners and third parties. However, internal resistance can squelch the initiative, as management grapples with potential security, data privacy and brand reputation risks. While these concerns are valid, if…

An Analysis of ID Proxy Initiatives Across the Globe

Real-time instant payments have become a hallmark of the digital economy and financial system. As part of Cenfri’s growing work in payment ecosystems, this report clarifies and investigates proxy and addressing services as a critical lever for adoption of instant or near instant payments as part of the evolution of payment systems in sub-Saharan Africa.

e-Estonia – an advanced digital society

Named ‘the most advanced digital society in the world’ by Wired, ingenious Estonians are pathfinders, who have built an efficient, secure and transparent ecosystem that saves time and money. e-Estonia invites you to follow the digital journey. The website provides information and solutions they have implemented and their impact.

Building Inclusive Payment Ecosystems in Tanzania and Ghana

While this analysis could have highlighted the experiences of any number of countries that have succeeded in developing inclusive payment ecosystems, the Tanzanian and Ghanaian experiences hold unique and complementary lessons. Tanzania has experienced explosive growth in the use of mobile money since the service was first introduced in 2008. With several providers competing for market share, a range of new use…

Interoperability in East Africa: Dispatches from the Home of Mobile Money

The presenation shows that success of interoperability depends on finding the right balance between governance, business and technology arrangements for participants.

MicroSave Agent Network Accelerator: India Second Wave

The research focuses on operational determinants of success in agent network management in India and builds upon the findings from the first wave, which MicroSave completed in 2015. The report describes the agency banking structure in the country and key performance metrics, such as agent viability, agent network structure, the quality of provider support, and…

The 2017 Brookings Financial and Digital Inclusion Project Report: Building a Secure and Inclusive Global Financial Ecosystem

The 2017 Brookings Report identified four priority areas that warrant additional action on the part of the international financial inclusion community: 1) establishing specific, measurable financial inclusion targets; 2) collecting and analyzing data relevant to financial access and usage, particularly among underserved groups; 3) advancing regulatory changes designed to facilitate financial inclusion; and 4) enhancing…

ITU-T Focus Group Digital Financial Services Ecosystem

This Report by ITU, defines the Digital Financial Services ecosystem and describes the players and their roles within the Ecosystem. These players include users (consumers, businesses, government agencies and non-profit groups) who have needs for digital and interoperable financial products and services; providers (banks, other licensed financial institutions, and non-banks) who supply those products and…

The U.S. Path to Faster Payments. Final Report Part Two: A Call To Action

The Faster Payments Task Force (task force) is a broad and inclusive group of stakeholders with representatives from organizations across the payments community, including financial institutions, nonbank payment providers, businesses (merchants and corporates), consumer groups, federal and state government agencies, regulators, standards bodies, industry trade organizations, consultants, and academics. Acting as a catalyst, the Federal…

The US Path to Faster Payments. Final Report Part One: The Faster Payments Task Force Approach

The Faster Payments Task Force is a broad and inclusive group of payment industry stakeholders with representatives from organizations across the payment ecosystem, including financial institutions, non-bank payment providers, regulators, standards bodies, consultants, businesses (merchants and corporates), and consumer groups. The Federal Reserve assembled the task force to collaboratively identify and evaluate alternative approaches to…

Digital Banking Manifesto: The End of Banks?

This report from the Massachusetts Institute of Technology investigates the current state of our banking system and how the rise of the Digital Bank and digital currencies will affect the future of finance. MIT’s Alex Lipton, David Shrier and Alex “Sandy” Pentland take you through the intricacies of the Digital Bank.

Facilitating Interoperability in Digital Finance Services in India

This paper reviews the existing literature on interoperability, international experiences, regulations applicable in India, presenting a way forward for different stakeholders including industry, civic society, experts and regulators to work together for facilitating interoperability while balancing competing interests in the market.

Financial and Digital Inclusion Project Report 2016

The Brookings Financial and Digital Inclusion Project (FDIP), launched in summer 2014, examines access to and usage of secure, affordable formal financial services among underserved populations. The objective of FDIP is to provide policymakers, the private sector, representatives of non-governmental organizations, and the general public with information that can help improve financial inclusion in their…

Payment System Interoperability and Oversight: The International Dimension

This report by International Telecommunication Union (ITU), considers the implications of PSI interlinking and international interoperability for central bank oversight policy, and elaborates on a set of principles that complement those developed in the companion report. The principles cover some critical institutional aspects which underpin the establishment of international interoperability agreements, as well as the…

Payment, clearing and settlement systems in South Africa

South Africa, like many African countries, has varying requirements for payment systems and payment instruments. In urban areas, sophisticated first-world electronic facilities and instruments are demanded, while in remote rural areas, the predominant requirement is cash-based. This is reflected in the physical payment system infrastructure implemented throughout the country. Over the past few decades, the…

Fighting Poverty, Profitably

This report from the Gates Foundation’s Financial Services for the Poor program, focuses on the economics of payment systems to understand how they can be transformed to serve poor people in a way that is profitable and sustainable in aggregate.

Reducing risk and increasing resilience in RTGS payment systems

This White Paper from SWIFT explores why the RTGS matters, the need for the RTGS, and best planning for RTGS resilience.

Achieving Interoperability in Mobile Financial Services: Tanzania Case Study

This case study from IFC examines Tanzania’s journey to-date in establishing rules to govern MFS interoperability by tracing the contextual factors, motivations, and processes that contributed to the agreement reached in September 2014 to interconnect according to an agreed industry set of rules for wallet-to-wallet transfers (supported with bilateral agreements between operators). It builds on…

Interoperability and the Pathways Towards Inclusive Retail Payments in Pakistan

Interoperability of retail payment instruments is not an objective in its own right; rather it is a means of achieving other desirable objectives. Interoperability can promote a range of intermediate objectives such as greater productive efficiency, convenience for customers and dynamic efficiency through promoting competition within the financial sector. However, the attainment of intermediate objectives…

A Digital Money Grid for Modern Citizenship: Latin American Scenarios, 2015-25

This paper from Ignacio Mas explores five different transition paths to the realization of an inclusive, affordable, real-time money grid that connects all citizens. The five paths represent different ways to deal with the business model challenges of defeating the tyranny of scale and the construction of fuller customer propositions. They differ fundamentally in terms…

Realizing the Potential of Branchless Banking: Challenges Ahead

This paper from Ignacio Mas further develops a broad vision for financial inclusion sketched out by Mas (2008), where payments can be easily made through an electronic network. What makes visioning such a payments utility possible is the technology we have today, which can be used to bridge distances, close information gaps, contain settlement risks,…

The Economics of Branchless Banking

This paper by Ignacio Mas provides a formal analysis of the economic drivers for branchless banking solutions. It exposes the design trade-offs that occur at the each of the key layers of service: the retail network (transaction acquisition), payments network (transaction aggregation and routing) and account/service platforms. It also reviews the volume drivers of various…

Branchless and Mobile Banking Solutions for the Poor: A Survey of the Literature

This paper by Ignacio Mas and others reviews the growing literature that has spawned around branchless and mobile banking in developing countries over the last five years. Around 2.6 billion people in the world do not have access to formal financial services, and yet 1 billion of them have a mobile phone. Branchless banking systems…

The impact of API maturity on the Financial Inclusion agenda

This paper contextualizes the value of ‘open’ and ‘mature’ APIs and what that means. It outlines some of the key characteristics of what APIs for such Emerging Market, Financial Inclusion focused systems are and the challenges being faced.  It explores some of the (disjointed) efforts being made to address the gaps and in leading to…

Why Open APIs Matter: Tech Partnerships Power Development

If you’re one of the millions of people who use their mobile to send money or pay a bill, you probably don’t spend much time thinking about how your phone connects to the mobile network, and then to a financial service provider, and then to the recipient of your cash. But as software developers, this…

Can Open APIs Accelerate the Digital Finance Ecosystem?

Safaricom announced it would finally open access to its M-PESA API in the summer of 2015.  What makes Safaricom’s announcement significant is the opportunity it presents for developers to build applications that use mobile money to facilitate payments for new types of services. An open API will likely spur more innovation in products and services…

The rise of APIs

The number of SaaS applications has exploded and there is a rising wave of software innovation in the area of APIs that provide critical connective tissue and increasingly important functionality. There has been a proliferation of third-party API companies, which is fundamentally changing the dynamics of how software is created and brought to market. This article…

APIs: A bridge between mobile operators and start-ups in emerging markets

In 2006, fewer than 400 public APIs were available globally. Ten years later there are around 15,000 APIs, with 40 new ones created every week. Salesforce already generates 50% of its revenues via APIs, eBay generates 60%, and Expedia 90%. Welcome to the new API economy. This paper from the GSMA looks at how in emerging…

Managing Operational Risk in Clearing and Settlement Systems

Awareness of operational risk has increased greatly in recent years, both at individual financial institutions and for payment, clearing, and settlement systems (PCSS). PCSS consist of networks of interconnected elements (i.e., central operators, participants, and settlement agents); operational problems at any one of the key elements have the potential to disrupt the system as a…

Achieving Interoperability in Mobile Finacial Services: Tanzania Case Study

In September 2014 the mobile financial services industry in Tanzania signed an agreement that allows customers belonging to one mobile money scheme to transfer money to a customer with an account at a different mobile money scheme. Tanzania thus became the first country in the world with an industry-agreed interoperable market for mobile financial services.…

Operational Guidelines for Interoperability: A Customer-centric Approach

This publication sets out operational guidelines for mobile money providers to consider when introducing an interoperable service for their customers. Successful A2A interoperability should bring significant benefits for providers and customers alike, but poor implementation could jeopardise adoption and result in inefficient use of financial resources, inequitable risksharing among participants, actual financial losses for participants,…