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Gates foundation opens mobile payments software

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The Bill & Melinda Gates Foundation has released new open-source software for creating payment platforms that will help unbanked people around the world access digital financial services.

The software is designed to provide a reference model for payment interoperability between banks and other providers across a country’s economy. It is available now, free-of-cost, for software developers to adapt and banks, financial service providers and companies to implement. Information on the code can be found at mojaloop.io.

Current data from the World Bank shows that nearly two billion people in developing economies lack bank accounts and miss out on the benefits and security that basic financial services provide. Digital financial services, such as mobile money on cell phones, have rapidly expanded over the last two decades because they are convenient for users and cost-effective for companies aiming to serve new markets. In Kenya, an estimated 194,000 households have moved out of extreme poverty due in part to their access to M-Pesa, a mobile money platform, and users’ ability to save money more effectively. Digital financial services are now available in nearly 100 countries according to GSMA, an organization representing mobile network operators. However, global expansion of these services—especially to the world’s poor—has been hampered, in large part, by a lack of interoperability between digital financial services and payment platforms.

The new software, called Mojaloop, establishes a blueprint for connecting today’s financial services sector, and can be used as a solution to barriers that banks and providers seeking interoperability have traditionally faced. Delivering financial services to the poor is prohibitively challenging for many businesses because they struggle to invest adequately in complex technology while maintaining a commitment to low-cost, inclusive services. This has led to a prevalence of consumer payment options that are out of reach for many people in developing economies, or which limit customers’ ability to transact across products, banks and borders. These and similar challenges have dissuaded many companies from expanding into developing markets altogether.

Mojaloop can be used by financial institutions and commercial providers, to simplify and reduce the cost of developing inclusive payment platforms. It was designed to serve ultimately as a model for national payment switching systems that, for example, enable an individual’s digital wallet to connect with her employer’s bank account and her children’s school account to complete monthly transactions. The code can also be applied to adapt and improve existing services.

“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,” said Kosta Peric, Deputy Director, Financial Services for the Poor, at the Gates Foundation. “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.”

Mojaloop (building off the Swahili word “moja,” which means “one”) was created in partnership with fintech developers Ripple, Dwolla, ModusBox, Crosslake Technologies and Software Group, using cutting-edge technology such as the Interledger Protocol, a solution for settling funds among multiple providers across their individual systems. It joins other promising digital financial software, but is the first model that can help extend interoperability from mobile money providers to any bank, merchant or government institution in a customer’s economy in a way that specifically meets the needs of the poor.

“Interoperability is necessary both for financial inclusion and market maturity, but it is a complex thing to achieve,” said Benno Ndulu, Governor of the Bank of Tanzania, the country’s national bank. “We are excited to explore implementation of this because of how it can simplify that capability for businesses and governments, and speed up access to financial services.”

“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,” said Chris Hamilton, CEO of BankservAfrica. “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.”

Developers can access the new software on GitHub, the world’s leading open-source development platform. It 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 will not 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.

Mojaloop was created by the Gates Foundation’s Level One Project, which is aimed at leveling the economic playing field by crowding in expertise and resources to build inclusive payment models to benefit the world’s poor. Alongside Mojaloop’s development, the project also brought together four mobile systems companies—Ericsson, Huawei, Telepin, and Mahindra Comviva—to develop an Open API for mobile money interoperability. These APIs will allow mobile money providers to integrate seamlessly with Mojaloop and products built from it.

“In order to achieve the full potential of mobile money, we must evolve today’s complex and often fragmented digital payments ecosystem,” said Mr. Shi Yaohong, President of Software Product Line at Huawei. “I look forward to exploring opportunities to leverage Mojaloop to help us achieve our goal of bringing digital financial services to all poor and low-income customers.”

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IoT at starting gate

South Africa is already past the Internet of Things (IoT) hype cycle and well into the mainstream, writes MARK WALKER, associate vice president of Sub-Saharan Africa at International Data Corporation (IDC).

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Projects and pilots are already becoming a commercial reality, tying neatly into the 2017 IDC prediction that 2018 would be the year when the local market took IoT mainstream. Over the next 12-18 months, it is anticipated that IoT implementations will continue to rise in both scope and popularity. Already 23% are in full deployment with 39% in the pilot phase. The value of IoT has been systematically proven and yet its reputation remains tenuous – more than 5% of companies are reluctant to put their money where the trend is – thanks to the shifting sands of IoT perception and success rate.

There are several reasons behind why IoT implementations are failing. The biggest is that organisations don’t know where to start. They know that IoT is something they can harness today and that it can be used to shift outdated modalities and operations. They are aware of the benefits and the case studies. What they don’t know is how to apply this knowledge to their own journey so their IoT story isn’t one of overbearing complexity and rising costs.

Another stumbling block is perception. Yes, there is the futuristic potential with the talking fridge and intelligent desk, but this is not where the real value lies. Organisations are overlooking the challenges that can be solved by realistic IoT, the banal and the boring solutions that leverage systems to deliver on business priorities. IoT’s potential sits within its ability to get the best out of assets and production efficiencies, solving problems in automation, security, and environment.

In addition to this, there is a lack of clarity around return on investment, uncertainty around the benefits, a lack of executive leadership, and concerns around security and the complexities of regulation.  Because IoT is an emerging technology there remains a limited awareness of the true extent of its value proposition and yet 66% of organisations are confident that this value exists.

This percentage poses both a problem and opportunity. On one hand, it showcases the local shift in thinking towards IoT as a technology worth investing into. On the other hand, many companies are seeing the competition invest and leaping blindly in the wrong direction. Stop. IoT is not the same for every business.

It is essential that every company makes its own case for IoT based on its needs and outcomes. Does agriculture have the same challenges as mining? Does one mining company have the same challenges as another? The answer is no. Organisations that want their IoT investment to succeed must reject the idea that they can pick up where another has left off. IoT must be relevant to the business outcome that it needs to achieve. While some use cases may apply to most industries based on specific circumstances, there are different realities and priorities that will demand a different approach and starting point.

Ask – what is the business problem right now and how can technology be leveraged to resolve it?

In the agriculture space, there is a need to improve crop yields and livestock management, improve farm productivity and implement environmental monitoring. In the construction and mining industry, safety and emergency response are a priority alongside workforce and production management. Education shifts the lens towards improving delivery and quality of education, access to advanced learning methods and reducing the costs of learning.  Smart cities want to improve traffic and efficiently deliver public services and healthcare is focusing on wellness, reducing hospital admissions and the security of assets and inventory management.

The technology and solutions selected must speak to these specific challenges.

If there are no insights used to create an IoT solution, it’s the equivalent of having the fastest Ferrari on Rivonia Road in peak traffic. It makes a fantastic noise, but it isn’t going to move any faster than the broken-down sedan in the next lane. Everyone will be impressed with the Ferrari, but the amount of power and the size of the investment mean nothing. It’s in the wrong place.

What differentiates the IoT successes is how a company leverages data to deliver meaningful value-added predictions and actions for personalised efficiencies, convenience, and improved industry processes. To move forward the organisation needs to focus on the business outcomes and not just the technology. They need to localise and adapt by applying context to the problem that’s being solved and explore innovation through partnerships and experimentation.

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ERP underpins food tracking

The food traceability market is expected to reach almost $20 billion by 2022 as increased consumer awareness, strict governance requirements, and advances in technology are resulting in growing standardisation of the segment, says STUART SCANLON, managing director of epic ERP

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Just like any data-driven environment, one of the biggest enablers of this is integrated enterprise resource planning (ERP) solutions.

As the name suggests, traceability is the ability to track something through all stages of production, processing, and distribution. When it comes to the food industry, traceability must also enable stakeholders to identify the source of all food inputs that can include anything from raw materials, additives, ingredients, and packaging.

Considering the wealth of data that all these facets generate, it is hardly surprising that systems and processes need to be put in place to manage, analyse, and provide actionable insights. With traceability enabling corrective measures to be taken (think product recalls), having an efficient system is often the difference between life or death when it comes to public health risks.

Expansive solutions

Sceptics argue that traceability simply requires an extensive data warehouse to be done correctly, the reality is quite different. Yes, there are standard data records to be managed, but the real value lies in how all these components are tied together.

ERP provides the digital glue to enable this. With each stakeholder audience requiring different aspects of traceability (and compliance), it is essential for the producer, distributor, and every other organisation in the supply chain, to manage this effectively in a standardised manner.

With so many different companies involved in the food cycle, many using their own, proprietary systems, just consider the complexity of trying to manage traceability. Organisations must not only contend with local challenges, but global ones as well as the import and export of food are big business drivers.

So, even though traceability is vital to keep track of everything in this complex cycle, it is also imperative to monitor the ingredients and factories where items are produced. Having expansive solutions that must track the entire process from ‘cradle to grave’ is an imperative. Not only is this vital from a safety perspective, but from cost and reputational management aspects as well. Just think of the recent listeriosis issue in South Africa and the impact it has had on all parties in that supply chain.

Efficiency improvements

Thanks to the increasing digital transformation efforts by companies in the food industry, traceability becomes a more effective process. It is no longer a case of using on-premise solutions that can be compromised but having hosted ones that provide more effective fail-safes.

In a market segment that requires strict compliance and regulatory requirements to be met, cloud-based solutions can provide everyone in the supply chain with a more secure (and tamper-resistant) solution than many of the legacy approaches of old.

This is not to say ERP requires the one or the other. Instead, there needs to be a transition provided between the two scenarios that empowers those in the food supply chain to maximise the insights (and benefits) derived from traceability.

Now, more than ever, traceability is a business priority. Having the correct foundation through effective ERP is essential if a business can manage its growth and meet legislative requirements into the future.

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