February 12, 2021

Whitepaper: Google’s Design Principles for Third-party Initiation in Real-time Payment Systems

by ModusBox in Financial Inclusion , Mojaloop , Open Source 0 comments

We are excited to support the release of this whitepaper, developed by Google in collaboration with ModusBox and other Mojaloop core development team members. Our hope is that resources like this will aid countries and organizations in a financially inclusive response to the unprecedented demand for real-time payment solutions.

Welcome to the age of real-time payments. The pandemic propelled our need for digital means of communicating and transacting to curb the spread of disease. Although this accelerated transformation is the result of one of the most devastating events we will experience in our lifetime, we now see more clearly a future before us that has tremendous potential for including all people in the global financial system. This future will require the rapid development and deployment of national-level payment systems – a lofty task for even the most advanced governments. Thanks to The Bill and Melinda Gates Foundation, Google, and other contributors, much around best practices for developing inclusive payment systems are readily available.

ModusBox began working with the Gates Foundation in 2016 to build Mojaloop – the world’s first open source software for enabling interoperability in real-time payment systems. Mojaloop was designed and built on financial inclusion principles established from a decade’s worth of research by the Gates Foundation called the Level One Design Principles

A year ago, we announced Google as a newly added partner on the Mojaloop core development team. With Google’s contribution, Mojaloop can be easily extended to support Payment Initiation Service Providers (PISPs) – a critical component for rapidly scaling its availability and adoption to all tiers of financial service providers (FSPs). Essentially, PISPs enable even the most traditional financial institutions – which generally do not possess the in-house knowledge, skill, or resources required – to offer the modern services demanded by their customers.

That is why we are delighted to have collaborated with Google on its latest whitepaper: Design Principles for Third-party Initiation in Real-time Payment Systems. Third-party payment initiation (3PPI) is the functionality that enables a PISP to interact directly with the end-user, or account holder, to request the transfer of funds between two financial institutions connected via a real-time payment network.

ModusBox Founder and CEO, David Wexler, added this as part of his introduction:

3PPI removes the requirement for financial institutions to develop and roll out payment products to customers, enabling them to focus on the business of being the stewards of a healthy economy based on deposits and credit. It significantly reduces the cost to acquire new merchants and issue payment accounts to new customers, both for physical and e-commerce merchant transactions. A truly inclusive and scalable design will put 3PPI as a scheme service, reducing the cost of integration, benefiting small financial institutions and small fintech’s, and ultimately increasing customer choice and competition.

Real-time payments are here, and the pace of change is staggering. Our hope is that this work makes it easier for governments and organizations to think inclusively about designing and building an interoperable, modern payment system. Download the whitepaper today. If you have questions and would like to talk to the team that built Mojaloop, please contact us today.

Here’s to a brighter financial future that showed up ahead of schedule.

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