Mapping GSMA Mobile Money API use cases to the SDGs
Since their inception, mobile money services have long been discussed as a vector for financial inclusion. In a previous report, Harnessing the Power of Mobile Money to Achieve the Sustainable Development Goals, we explored the ways in which mobile money services can provide cross-cutting contributions to achieve the Sustainable Development Goals (SDGs) through the provision of a range of life-enhancing digital services.
While mobile money adoption and usage has been growing over the past years, barriers remain in unlocking the full potential of mobile money services, including high costs of interoperability undermining the development of mobile money ecosystems. The GSMA Mobile Money API is an initiative developed through collaboration between the mobile money industry and the GSMA. The main asset is a harmonised API Specification which aims to reduce complexity and fragmentation across mobile money platforms, and thereby simplify and accelerate third party integrations with mobile money providers. The API offers the potential to raise industry capability overall by advancing API functionality and common foundations for ecosystem innovation. The GSMA has released a new version (1.2) of the Mobile Money API Specification, which has added specific use case definitions for the 8 use cases as well as adding improved support for mobile money use cases through new APIs, API updates and technical improvements to the specification.
This report showcases how a harmonised API ecosystem through the use of the GSMA Mobile Money API can amplify mobile money’s role in achieving the SDGs by supporting the scaling of mobile money ecosystems and use cases. The contributions to SDGs were identified for each of the use cases supported by the GSMA Mobile Money API.
Due to the cross-cutting role of digital financial services across SDGs, a mapping approach was adopted to visualise these complex linkages. The report presents a static version of the mapping, which will also be available as a dynamic infographic to visualise the interconnections between use cases.
Harmonised API provides opportunities for the uptake of mobile money disbursement, remittances and bill payments, leading to financial inclusion for low income people
1.3 Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable
1.4 By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance
The GSMA Mobile Money API supports bulk disbursements, which can be used to deliver assistance: low income people and people affected by crises have access to safer, more traceable digitised cash-based assistance. Through remittances, low income people can rely on financial support from an extended network. The GSMA Mobile Money API provides a common API interface for multiple providers who have an interoperability solution to allow users to send remittances regardless of the sender and receiver’s providers. A harmonised API ecosystem can make integration of mobile money services with third parties easier and at a lower cost. Digitising value chains and customer journeys, including recurring payments, creates digital records that can help low income users build economic identities, which increases their access to financial services, including digital loans.
All API use cases have a cross-cutting contribution to the expansion of mobile money use cases, increasing the sector’s value and contribution to GDP
8.1 Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries
8.2 Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors
8.10 Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all
A harmonised API ecosystem lowers mobile money use case integration costs for third parties, which in turn creates opportunities for an increase in use cases adopted by vendors, merchants, governments, NGOs, banks, MFIs and other third party ecosystem actors. An increase in ecosystem mobile money transactions can considerably increase the value of the mobile money sector and its contribution to GDP.
Lower costs of API integration can help MSMEs formalise their operations, reduce costs for enterprises to take products to the market, increase MSME productivity and access to financing
9.3 Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets
A harmonised API for merchant payments, P2P transfers and recurring payments contribute to increased productivity through technological upgrading. These use cases are particularly cost effective for MSMEs in developing markets, in particular to process payments to suppliers and employees and for record keeping efficiencies. APIs can also support the creation of digital lending marketplaces where MSME borrowers are matched with institutional lenders. Digital lending reduces the credit constraints of micro and small enterprises.
Read the report for the full mapping between the GSMA Mobile Money API use cases and their contribution to the SDGs.