A Vision For A Faster, Safer And Open Mobile Money API

Mobile Money

Mobile Money has enormously grown as a tool of quick monetary transactions to the majority unbanked populace. It is naiveof someone to talk about mobile money without mentioning M-PESA that has received worldwide acclamation for its  blockbuster success  — over 17 million subscribers. This growth has had a massive effect on various economic activities such as banking, e-commerce and et al. However, I will focus on e-commerce in this post. E-commerce websites in Uganda (Africa) are growing steadily, more applications; native and web-based are being developed and the time of saturation is coming when the developers of these products will start looking for ways to monetize their apps through  in-app sale of  items.

The opportunity for online payments is immense but currently there is a dearth of potential  because of the closed nature of the mobile money API by telcos. The strict regulations have brought into effect third party systems  for accepting payments which are marred by slow motion execution procedures in tandem interoperability woes with different platforms.

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Some of the apps have created a way for online payments, you actually send them mobile money and they top up your online account, then you can make purchases. This process though is a little bit frustrating if the user has to make frequent purchases and it won’t be long before they drop using that system altogether.

I think a simple, faster but yet very powerful method could be introduced to streamline and make the process of online payments. It benefits everyone in the loop from the Mobile Money Service Provider to the Developer to the User making the payment

It is as simple as follows:

1. Click on the Make Payment Button or whatever the app has to enable you make your payment.
2. Select your Service Provider.
3. Enter your Telephone Number and Mobile Money PIN.
4. The Payments Processor validates the details and gets back to you with a result (either successful or not).

This painless and seamless method though quick may come with 2 very important questions: Can it be done?  Is it secure?

Firstly, Yes it can be done because this is very similar to the way we withdraw Mobile Money from Agents, in this case the App User represents the person withdrawing and the Payments Processor represents the Agent, the Service Provider remains who they are.

Secondly, security can be achieved by ensuring that the developer is encapsulated from the actual working of the application, all they use is an API and never know how the actual payment is transferred to them. Timed sessions are tied to specific accounts so that payments are made in a very short time.

At the end of the day everyone is happy, the App user gets what he/she wants in a fast, painless mechanism, the developer receives the rewards for the use of his/her/their app and the Telecom Company gets its commision along side wider adoption of service – everyone wins.

Much as the closed nature of the mobile money API is dictated by telcos, there will reach a point of market saturation where they will have to live off subsidiary products such as mobile money — a key pillar of scalable microfinance — whose magnitude on the economy has been felt. It would be wise for telcos to improvise ways to mitigate the discrepancies in the industry rather than wait for the disruptive forces of demand and supply. This can be witnessed by the 2011 acquisition of Fundamo by Visa. key players’ interest in the mobile money market is growing by the day.

Editor’s note: This post is by Daniel Olel, a Techpreneur and Computer Science student at Makerere University Kampala.

Image via NMG