Among other hinderances, the answer lies in the capacity of different mobile platforms to connect with multiple service providers and allow transactions to take place. Today the vast majority of the applications used in
But what are these costly APIs? Just like we talk to each other to make things happen, so do software programs. Software programs need to communicate to perform the various tasks that we want them to perform. For that matter, the importance of an API as an enabler for an open digital payments ecosystem and an inclusive digital economy cannot be overstated. It is that connection that allows software programs to 'talk' to one another, interpreting what information is being given and what actions the software wants the other to perform.
For instance, for a ride hailing service like safeboda or
Similarly, for a business to sell its products and services online (without any direct contact with the buyer), they would need to find means of being paid online (digitally) too. The most common payment option in
In
UNCDF pushes industry players to open their APIs
During a workshop on 'OPEN APIs/ OPEN DATA in the Digital Economy' held in
"Third party partnership programmes are the standard model for growth employed by large enterprises across all industries. Companies testify to the significant benefits including accelerated growth, higher brand awareness, increased revenue and presence in new markets," Mitha says.
In
Unfortunately, traditional financial service providers are limited in their ability to innovate and deliver advanced customer experiences. According to Mitha, tomorrow's financial services providers (FSPs) will need to be radically different to compete in the digital finance space. Opening their systems will allow for more willing and talented companies, particularly startups to innovate for the customers of these FSPs -- thus improving the value proposition of the latter with new services.
What this means for customers
"UNCDF is committed to working with public and private sector partners to build an Inclusive Digital Economy that leaves no Ugandan behind in this digital era", Chris Lukolyo, Digital Country Lead for UNCDF says.
From asking for and making social contributions, making utility payments, online shopping, to accessing critical services like education and the much-needed health care, digital technologies can and have improved the livelihoods of humanity. When it is easier and cheaper for developers to test new ideas, customers get a range of services to choose from and make payments from their bank or mobile money accounts in real time. By fueling innovation, open APIs therefore provide customers with a wider choice of innovative services and solutions to meet their various needs. This also comes with increased flexibility and transparency in how customers transact.
While DFS providers could invest more in innovation, usually low-income communities are not a priority. Yet, with access to affordable digital solutions, these communities represent a wide customer base that can accelerate the business growth of the sector. Open APIs for instance can provide access to precious data that would be otherwise daunting to find for communities without access to formal banking services. Often, these communities have no data on their income; no credit history; no history of payments. Technology is making it easy to digitize this information. When systems are able to speak to each other, this data can be available to financial services providers and eventually give currently underserved customers access to services like credit and insurance.
Next steps
UNCDF is holding one on one discussions with various insitutions in the industry particularly telecom companies, banks and Fintechs on how to work towards opening their APIs.
UNCDF has helped build the rails of the digital economy in
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