Mojaloop: The Future of Financial Interoperability

Global Poverty

According to Global Bank, The Bill & Melinda Gates Foundation has created the most informative and comprehensive database that stores information on how adults around the world manage their finances. The database has been publishing updates since 2011, when it first came out.

According to the 2017 report, over 1.7 billion people in the world remain unbanked. This means they are not registered with any financial institution.

Despite its technical advancement, China occupies the first place as the country with the highest level of unbanked adults. In India, Indonesia, and Pakistan, a lot of people have still not registered with financial institutions. However, there is also Africa, the continent that experiences the highest level of poverty in the world.

As we can see from the map, the majority of the unbanked live in Africa.

The World-Changers

In October 2017, Miller Abel, principal technologist and deputy director of the Gates Foundation, tweeted that they were cooperating with Ripple and Coil to learn how inter-ledger technology could help the unbanked to finally join the world’s financial system. The project is called Mojaloop, from the Swahili moja, which means one. Basically, the project aims to connect people all over the world and build a “financial internet” in which all people will be able to trust each other.

The Bill & Melinda Gates Foundation

The foundation created by Bill and Melinda Gates is charitable and has nothing to do with profit or margin. It works in five areas: Global Health, Global Development, Global Policy & Advocacy, Global Growth & Opportunity, and its U.S Program. All of these fields contain dozens of projects designed to help people all over the world. The team focuses on cooperation, innovation, risk-taking, and, most importantly, results.

One of the projects in the Global Growth & Opportunity area is Mojaloop project, which provides financial services for the poor to allow the security and the ability to thrive.

Why just not give money for charity to institutions located in poor countries? This is exactly why the Gates Foundation needs Ripple. Giving money to charity means trusting a bank/ medical institution/educational institution/ =government intermediary, which is risky due to the high level of corruption in developing countries. So, how does Ripple manage the risk of money being stolen?


Today, customers’ needs are changing with the appearance of new technologies; therefore, their payment requirements are also changing. People are no longer in need of third parties to hold their money; they require opportunities to send money directly, quickly, safely, and seamlessly.

Ripple provides all of the previously mentioned features with the “internet of value,” which consists of two functional groups: network users (SMEs, corporates, small banks, payment providers) and network members (banks and payment providers). Network users can only send transactions; network members process transactions and help improve liquidity on the platform.

RippleNet enables global money transfers and offers its users cost efficiency, real-time transactions, and security.

The Ripple Protocol Consensus Algorithm

Ripple is a cryptocurrency (XRP), and RippleNet is a payment system; the strange part is that Ripple is not built on the blockchain. To ensure security and privacy on the platform, Ripple has created its own protocol: RPCA (Ripple Protocol Consensus Algorithm).

The technology with which RPCA provides security is called PGP signatures. If in an ordinary payment system people must trust third parties, with PGP signatures, if Alice trusts Bob, Bob trusts Carol; then Alice can trust Carol. By sending transactions to each other, users are basically building a non-third-party trusted system.

In its attempts to help the world of finance become safer and more efficient, Ripple has begun cooperating with the Gates Foundation to ensure secure payments and to provide the poor in developing countries with this opportunity. Together, they’ve created Mojaloop: open-source software that provides interoperability to take on the challenges of the unbanked all over the world.


For most people, it is hard to imagine their lives without the ability to pay their bills digitally or buy things using their credit cards. However, for about 2 billion people around the world, these are real challenges.

If John, who lives in the USA, can easily send money to his parents in France, Lulu from Kenya can send money to her parents in Ethiopia only by bringing cash personally. Distance prevents her from doing this, as the addressee lives too far away.

Moreover, if the school at which Lulu’s daughter studies has a mobile banking account, she still will not be able to pay the bills.

Mojaloop solves all issues of interoperability in poor regions with innovation connecting all payment providers and banks on one platform. With it, Lulu is able to send money to her parents in Ethiopia, pay her electric bill, or buy groceries with her mobile phone.

How Is It Possible?

In 1973, Motorola became the first producer of handheld mobile phones. Nowadays, after 46 years, almost everyone on the planet has access to a mobile connection. It may sound controversial, but Africa is one of the growing markets in the field of mobile technology: almost everyone owns an android phone or an old touch-tone telephone and has access to an internet connection. This makes it possible for African banks to provide people with the ability to use online financial services.

However, the need for cheap transactions is only covered if the transaction is completed within one provider. This makes cross-provider payments impossible or expensive to handle, and leads to closed financial circles: Alice, Bob, and Carol can exchange money only within their group.

Mojaloop makes costless digital payments possible, no matter which provider or bank a person uses. This is a platform that connects all payment opportunities within one ecosystem.

The Gates Foundation team has created open-source software that makes it easy to connect mobile money providers and banks, and anyone can use it. Mojaloop enhances more than just interoperability; it has become the first in the history the “internet of payments”. With this platform, money is transferred as easily as the information in instant-messaging chats is transferred now.

Ripple’s developers have demonstrated exactly how mobile banking for crypto will work. The only necessary step is to send a message to an XRP address with the text “Send 5 EUR to +31698368590.” 5 EUR, for example, could be money to pay for groceries, and +31698368590 is the number of the merchant’s wallet.

Ripple converts money to fiat currency quite quickly in comparison with other exchanges, and the transactions themselves are processed faster with xRapid. There is no need to wait until the majority of users have verified a transaction, as this is done on the blockchain.

Let’s keep in mind that the Bill & Melinda Gates Foundation is a charitable institution that isn’t chasing any financial profit from what they do. So, if the foundation or anyone else decides to give money for charity, they will be able to send money directly to Lulu from Kenya or her parents in Ethiopia as simply as they would send an SMS.

“The project, definitely, has a great future and implementation; however, it will take time until the reported 1.7 billion of unbanked individuals get their wallets and join the “internet of payments,” says the Head of the Consulting Department at Applicature, Stan Sheliakin.


Mojaloop, with the support of technical geniuses from the Gates Foundation and Ripple’s fast and secure payment system, seems to have only one challenge: education. Over time, however, the unbanked will learn how to use mobile money in order to secure academic opportunity via technology.


Mojaloop brings freedom to those who are still prevented from managing their own opportunities and priorities.

By eliminating third parties, charitable organizations won’t have any concerns about losing money to fraudulent actions, and, the poor won’t have to worry about fees on inter-provider transactions. Mojaloop is uniting banks and mobile banking providers.

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