Page 210 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

F ACCESS TO AND USE OF APPLICATION PROGRAMMING INTERFACES

11 Application programming interfaces

11.1 Overview

Application Programming Interfaces (APIs) present a new innovation in technology and DFS. Common APIs are
a very promising technical solution to reduce fragmentation amongst DFS players. They provides a gateway
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for smaller SPs to utilize the capacity, reach and capabilities of larger entities who make their APIs available.
Essentially, to gain access to the larger capabilities, all that is required is to integrate the API into a feature set
or application being developed. 198

The best known example in the mobile environment is availability of the Google Android Operating System
API: developers can simply develop their products, integrate the Android API, and know that their app is
compatible with Android phones.
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In the case of DFS, an API defines the way a developer should write a program that successfully requests
services from the DFS platform. Any provider offering a DFS accounts could make an API available that allows
any permitted entity to automatically debit (or credit) the DFS account, to simply be notified when a payment
has been made, or add DFS payment capabilities to e-commerce web sites. Alternatively, a forex provider
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could make an API available that allows entities who need forex components in their business – or smartphone
apps – to gain access to these features by simply incorporating the forex API. The ability then to have seamless
access to these facilities reduces fragmentation of services in the market and so benefits customers.
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A common API across all DFS SPs in a country could serve as a public good: for example, an API providing a
common method for biometric data capture for KYC purposes, and then transmission directly to regulators.
APIs were opened up in 2015 for non-exclusive use by Safaricom Kenya for access to its M-PESA service;
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Orange has opened up APIs via its Orange Partner program for developers in Africa. In the absence of
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common APIs, some workarounds have been created by entrepreneurs, primarily for access to DFS accounts
where individual entities are unable to do so. 204

11.2 Competition aspects

APIs represent an enormous potential enhancement of DFS reach, in some cases making DFS payment
methodologies mainstream. Integration of SPs using APIs into DFS systems of larger providers may, however,
conflict with the business activities and plans of the latter. This could manifest as a delay in the vetting process

197 The GSMA is working to drive the adoption of standardized APIs. See GSMA (2016) Launching GSMA Mobile Money APIs To Raise
Industry Capabilities, available at https:// goo. gl/ O4CkOP
198 On the openness of DFS APIs, see Tellez-Merchan, C (2015) Can Open APIs Accelerate the Digital Finance Ecosystem?, available at
https:// goo. gl/ 1a6unm
199 Android OS compatibility is not a given though, due to various changes to the OS by Google.
200 See for example the MTN mobile money API being provided to Uganda e-commerce web sites. Its ‘Request for Payment’ API
sends an authentication message (Request for Payment) to a customer’s mobile phone if that number was inputted as a payment
method on a web site. The customer then verifies the transaction with their MTN Mobile Money PIN number.
201 A single API is the equivalent to a single common short code being available for customers across multiple MNOs, rather than
requiring individual access number for each MNO.
202 Safaricom’s G2 API includes Automated Payment Receipt Processing; Automated Payment Disbursements; and Automated Pay-
ments Reversal. See further https:// goo. gl/ IcZG3w
203 The APIs for its Orange Money include e-commerce web site payment integration; and creating your own USSD service.
204 See for example PesaPI, an open source API for mobile money systems, released under the BSD(lite) license. It allows entrepre-
neurs to seamlessly integrate mobile money systems into their application, making it easy for your application to detect when
a payment has been received. It currently supports DFS operations in Kenya, Tanzania, Ghana, Rwanda, Somalia, and DR Congo.
See http:// www. pesapi. com/

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