The Mojaloop moment: Expanding financial inclusion

From Rwanda to the Philippines, new payment platforms powered by the foundation-supported Mojaloop software are on the cusp of providing millions with the many benefits of digital payments.
Sharon Umunyana, Technical Project Manager, Rwanda Information Society Authority (RISA), attends a brainstorming meeting regarding the implementation of Mojaloop software with RSwitch staff at the WiredIn offices in Kigali, Rwanda, on July 24, 2024.
Sharon Umunyana attends an implementation meeting regarding Mojaloop software in Kigali, Rwanda. ©Gates Archive/Alice Kayibanda
Sharon Umunyana, Technical Project Manager, Rwanda Information Society Authority (RISA), working on Mojaloop implementation, waits outside a crafts shop in Kigali, Rwanda, on July 24, 2024.
Sharon Umunyana works on Mojaloop's software implementation in Kigali, Rwanda. ©Gates Archive/Alice Kayibanda

Rwanda’s digital payment breakthrough

In the video above, Sharon Umunyana, a technical project manager for the Rwanda Information Society Authority (RISA), talks about how and why she and her team have been working on one of the first national deployments of Mojaloop.

Established in 2017 to champion Rwanda’s digital transformation and lead the construction of the country’s DPI, RISA was looking for a digital merchant payment system that could reach the many unbanked populations outside Kigali, the capital city, and also be owned and operated nationally, thus decreasing Rwanda’s reliance on foreign payment vendors. Mojaloop met both of those key requirements with an off-the-shelf package that let Umunyana and her team skip over much of the complex work that would be needed to build such a system from scratch.

Sharon Umunyana, Technical Project Manager, Rwanda Information Society Authority (RISA), attends a brainstorming meeting regarding the implementation of Mojaloop software with RSwitch staff at the WiredIn offices in Kigali, Rwanda, on July 24, 2024.

Without Mojaloop, Umunyana says, it would have taken them two years or more just to build a payment switch—a software solution that helps move payment transactions between different banks and digital payment providers. The creators of Mojaloop “thought about current scenarios in the world and even predicted some of the functionalities that would be needed in the future and then provided that for any country, anyone who wants to implement their own switch,” she says. “You can use it as is, or you can choose to customize it to your liking. It’s been easy to work with because they’ve already developed everything for us. We’ve just customized it for the local context of users and digital financial service providers.”

“It’s [Mojaloop] been easy to work with because they’ve already developed everything for us. We’ve just customized it for the local context of users and digital financial service providers.”

Sharon Umunyana, Technical Project Manager, Rwanda Information Society Authority (RISA), attends a brainstorming meeting regarding the implementation of Mojaloop software with RSwitch staff at the WiredIn offices in Kigali, Rwanda, on July 24, 2024.
Sharon Umunyana with Maalim Mohamed, solutions architect for RSwitch.

Umunyana is quick to point out that Mojaloop is easy to customize because of its open-source code, which confers many advantages. “Number one, it’s cost-effective,” she says. “Open-source software is generally free to use, which can significantly reduce the cost compared to proprietary software. Two: It provides enormous flexibility for customization. Since the source code is available, it can be modified to meet specific needs. Three, Mojaloop has a community of support that is continuously enhancing the software, and they can help you manage change and innovation on the platform. Four, transparency: The open nature of the code allows every user to inspect and verify its security. And lastly, I would say it helps to avoid vendor lock-in, and reducing the risk of dependency on vendors is why we’re doing this.”

That said, Umunyana notes that perhaps her biggest challenge is overcoming skepticism of open-source technology due to data privacy concerns—she has to explain to people that Mojaloop “can be customized to not expose any data. In addition, as required by Rwandan law, all data used by Mojaloop is hosted in-country instead of on foreign servers.

Umunyana estimates that the Rwandan deployment of Mojaloop is 85% complete and the system will go live before the end of 2024, several months earlier than anticipated. “With Mojaloop, we’ll be owning our own switch—a national payment switch,” she says. “Everyone will be included, regardless of economic status.”

Vice Catudio, CEO of Higala – an open payment system, poses for a photography in their headquarters in Manila, Phillippines.
Vice Catudio, CEO of Higala, poses for a photograph at the Higala office in Manila, Phillippines. ©Gates Archive/Martin San Diego
Higala CEO Vice Catodio (in white) with staff at the Talino Venture Labs office in Manila.Higala will bridge the gap between traditional banking and the underserved population. With only 18 out of 400 rural banks integrated into InstaPay (the Philippines’ instantelectronic fund transfer system), Higala will address the lack of interoperability among financial institutions.
Vice Catudio (L) with Talino Venture Labs CEO Winston Damarillo.

How Higala is banking the unbanked in the Philippines

On the other side of the world, in the Philippines, another team is set to debut an open payment system built on Mojaloop. A startup called Higala is building an IIPS that aims to reach the millions of Filipinos left out of the digital financial system by current banking institutions.

While the Philippines already has an instant electronic funds transfer system called InstaPay, which debuted in 2018, it includes only 18 of the country’s roughly 400 rural banks—which means that many Filipinos are left out. The problem, says Higala CEO Vice Catudio, is costs and infrastructure. “To be part of an instant payment system, a bank must have its records and core systems in digital form,” he says. “They also need to offer a mobile banking service to customers that includes IT and cybersecurity provisions. Then they need to get a license from the central bank, which includes requirements that are out of reach for smaller banks. And they need a talented pool of manpower to operate and maintain the payment system, and a lot of small banks just don’t have the capability.”

Higala CEO Vice Catodio (in white) with staff at the Talino Venture Labs office in Manila.Higala will bridge the gap between traditional banking and the underserved population. With only 18 out of 400 rural banks integrated into InstaPay (the Philippines’ instantelectronic fund transfer system), Higala will address the lack of interoperability among financial institutions.
Higala will bridge the gap between traditional banking and the underserved population.
An illustration of a car on a road that is being built
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Higala CEO Vice Catodio (in white) with staff at the Talino Venture Labs office in Manila.Higala will bridge the gap between traditional banking and the underserved population. With only 18 out of 400 rural banks integrated into InstaPay (the Philippines’ instantelectronic fund transfer system), Higala will address the lack of interoperability among financial institutions.
With only 18 out of 400 rural banks integrated into InstaPay (the Philippines’ instantelectronic fund transfer system), Higala will address the lack of interoperability among financial institutions.

For an affordable fee, Higala will provide all these services to rural banks to help them join the InstaPay system. Its Mojaloop-backed payment switch is also 75% cheaper to operate than the current switch, thus making these digital financial services much more affordable to low-income communities in the Philippines. Currently in a pilot phase for regulatory purposes, Higala expects the system to go fully live within a year.

“When we were exploring the idea of the platform and evaluating the different options, we thought about building everything from scratch,” says Higala’s chief technology officer, Francis Plaza. “Then we came across Mojaloop, which basically met all the criteria we were trying to evaluate, the biggest being that we wanted a platform we could build on top of, to extend, make it interoperable, and without adding high costs to our end users.”

Plaza also highlights the advantages of using an open-source technology that incorporates best practices from across different regions: “[A]s the community grows bigger, there will be a bigger support system, which will help derisk future implementations and maintenance,” he says.

Catudio adds: “If you want to deploy an instant payment system in your country, I think the quickest, most efficient, and most cost-effective way to implement one is to use Mojaloop.”

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