How Telco APIs Are Enhancing Africa’s Mobile Money Ecosystem

In Europe, open banking is associated with a wave of open application programming interfaces (APIs) rolled out by banks that allow authorized third parties to access account data and initiate payments.

But in Africa, while similar initiatives are certainly gaining traction, open banking APIs are only so useful in the context of sizable unbanked populations.

In Nigeria, for instance, World Bank Findex shows that less than half of Nigerian adults have a bank account. Yet despite that low ownership rate, Nigeria has a mobile penetration rate of around 87%. And although the precise data varies from country to country, the general pattern of large unbanked populations having high mobile penetration and a booming mobile money sector is repeated across the region.

What’s more, these days a range of mobile money wallets present a viable alternative to a bank account for a number of everyday use cases.

Related: Mobile Money Earns Its Stripes in Ethiopia’s Telecom Liberalization

It’s into this landscape that the Nigerian FinTech Mono has recently launched its “Telco API.”

The Mono Telco API aggregates data from Nigeria’s leading mobile providers to help businesses build innovative products and services that leverage their customers’ mobile network data.

In a blog post announcing the launch, Adeloye Olanrewaju, product lead at Mono, said that with users’ consent, clients “can securely retrieve reliable telco data to build inclusive products, offer more personalized experiences, and make more data-informed decisions for your business and users.”

The post goes on to list two main use cases for the new Telco API, first of which is the ability for businesses to use telco data to generate user insights and predict potential behavior based on transaction history.

Secondly, Olanrewaju proposes that the Telco API can be used by businesses to assess people’s creditworthiness by creating alternative credit scores based on their transaction history and transaction records that are aggregated, not from bank accounts, but from mobile money wallets.

APIs for Mobile Money Integration

Mono’s new API is made possible because the telcos themselves make users’ data available through their own APIs.

Just like open banking platforms enable businesses to connect to different bank APIs through a single interface, Mono will allow companies to pull data from the different Nigerian mobile money operators without having to interact directly with the APIs available from the likes of Airtel and MTN.

When PYMNTS spoke to Peter Ndegwa, CEO of Safaricom, the Kenyan company behind Africa’s largest mobile money service M-Pesa, he said that the firm welcomes partnerships with other players and pointed to the 42,000 developers who use M-Pesa APIs to give customers the services they need.

Through such APIs, Africa’s mobile money ecosystem is striving towards greater integration, with interoperability between different mobile networks becoming increasingly normalized. In Kenya, for example, mobile money payments can now be made to and from wallets on any network.

Read more: Kenyan Mobile Service Providers Link With M-Pesa Payments Platform

Perhaps the most impressive example of inter-telco connectivity can be observed in MFS Africa, which has partnered with mobile wallet providers across Africa to allow companies to connect to over 400 million mobile money wallets.

As the firm’s CEO Dare Okoudjou told PYMNTS earlier this year, technology is increasingly helping to plug mobile money wallets into economic activity that was previously only accessible with a bank account.

In 2019, MFS Africa became the first nonbank financial institution to connect to the Visa network and is now able to distribute Visa payment credentials to unbanked consumers and businesses across multiple African markets.

Read on: MFS Africa CEO: Prepaid Cards Open World of Online Payments to Millions in Africa

Like Mono, FinTechs like MFS Africa are opening up a world of opportunity for mobile money wallets users.

As such, whereas these wallets might have once been a poor comparison to bank accounts, with little functionality beyond peer-to-peer payments, they are becoming critical to meeting the everyday payments needs of African consumers and SMEs; from paying bills, purchasing goods online, and receiving small loans.

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