Gates Foundation Picks Ripple Technology to Connect 2 Billion Unbanked People
The Bill and Melinda Gates Foundation has selected Ripple's Inter Ledger Protocol to bring close to 2 billion unbanked people on a level playing field with the rest of the world.
The Bill and Melinda Gates Foundation has selected Ripple's Inter Ledger Protocol to bring close to 2 billion people on a level playing field with the rest of the world. A large part of the unbanked population resides in the developing world, where access to essential financial services is a pipe dream. Project Mojaloop was announced on Monday as a remedy to connect more unbanked people around the world to digital financial services.
Much of the work by the Gates Foundation is informed by research from parts of Africa, Latin America and Southeast Asia, where the limits of disparate financial infrastructure hold back the poor. So designing an open source free-cost software was a priority.
The non-profit brought together Ripple, Dwolla, ModusBox, Software Group and Crosslake Technologies to develop Mojaloop, an open source software using Ripple's open ILP technology. With this open technology, it is now easier to connect bank accounts, mobile wallets, and merchants in one inclusive system.
Kosta Peric, an ex‑SWIFT executive, now overseeing financial services for the poor at the foundation, knows too well the primary obstacles in the way of bridging financial services to the poor. He commented on the initiative in a statement:
"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."
Since the eventual users are service providers from the developing world, research findings from countries such as Kenya informed the software’s design. As it is, access to digital financial services via cellphones, such as Mpesa has flourished in select developing countries over the last two decades. The next step is to connect poor customers, merchants, banks, governments and mobile money providers on an interoperable platform.
Ripple CTO Stefan Thomas expressed confidence in the potential of Mojaloop to rein in millions of people into a global digital economy. Through an announcement, he said:
"Enabling the poor to make payments to anyone, anywhere, using a mobile wallet has implications beyond increased access to their domestic economies. It has the potential to bring millions into the fold of the global digital economy."
The World Bank estimates that close to two billion people in the southern hemisphere lack bank accounts and therefore miss out on all the accompanying benefits. One of the critical features of the project is the ability to drastically cut down the complexity and cost of setting up payment platforms to lower access barriers. Mojaloop is available on GitHub.