Open APIs

Despite the increasing number of people with access to digital payments, usage remains limited. According to the GSMA’s 2015 State of the Industry Report, less than one third of mobile money accounts are actively used, and among those, almost two-thirds of transactions are airtime top-ups. As a result, the contribution of digital payments to financial inclusion has so far been limited.

Given the growing penetration of digital payments in emerging markets, this infrastructure could form the “rails” that help distribute and scale a broad range of solutions to positively impact the lives of low-income customers. However large digital payment providers are not always best placed to deliver such solutions, and could be better off enabling third-party providers to deliver innovations. Such third-parties may bring disruptive B2C solutions to market, for example, through better technology, better knowledge of niche market segments, and the ability to leverage synergies with their own core business. However, most lack a reasonably effective means to leverage the digital rails to access the market and deliver their solutions at scale.

CGAP’s Open API initiative works with industry to ensure third-parties are able to leverage various capabilities and assets of digital payment providers to deliver innovative financial solutions for low-income individuals. Helping providers transition towards open platforms by adopting open APIs will increase access to the "rails", reduce the cost of integration for third parties, and accelerate the pace for innovation. Ultimately, this shift towards openness will benefit payments providers, third-parties and customers.