As the world signals a potential recession, now more than ever small investments in inclusive financial infrastructure will potentially go a long way for migrant workers, small businesses, and sole proprietors supporting families within emerging nations and across international borders. According to the McKinsey Global Institute, 1.4 billion people around the world face a host of challenges in moving currency in a safe, secure, and traceable manner within their digital economy due to the lack of an inclusive, interoperable, digital payment platform.
This is especially true among South East Asian corridors and in much of Sub-Saharan Africa, where unbanked adults cited the absence of local financial institutions and insufficient documentation as among the primary reasons they did not have a savings or checking account. While domestically mobile money offers some transaction products, these underbanked individuals can expect to pay high fees for in-country loans and banking transactions and anywhere from $12 to $15 for every $100 they move across borders, significantly more than the three percent transaction fee recommended in the United Nations’ Sustainable Development Goals (SDGs).
Named after the Swahili word for “one,” the Mojaloop open-source software project was established in 2017 by the Bill & Melinda Gates Foundation to address the lack of guaranteed inclusiveness and interoperability within nations’ payment systems to allow all citizens to fully engage in the global economy, whether that be in-country transactions, government-to-person payments, or cross-border payments.
According to a McKinsey report, if digital financial services were inclusive and interoperable using a simple mobile phone, then the 1.4 billion financially excluded citizens could finally connect to their nation’s digital economy. Inclusive interoperability would then result in $3.7 trillion being added to emerging economies by 2025. That’s the equivalent of adding another Germany to the world economy.
One of the biggest impediments to resolving this issue is that many payment providers ...
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