MTN Rwanda will by the end of this year launch  its Mobile Money API (Application Programming Interface), a platform that it said would allow local entrepreneurs and start-ups to build solutions that accept mobile money payments.

The development, according to the firm, is in line with plans to open up the mobile money participation further for businesses and enterprises.

Besides, the initiative comes at a time the country experiences a growth in digital payment adoption as a result of the coronavirus pandemic.

For instance, Data from Rwanda Utilities Regulation Authorities (RURA) indicate that the value of funds transferred via Mobile Money grew by 450 per cent to reach Rwf 40 billion in the first three months of the year.

Mobile money transactions have enabled budding e-commerce realms, making remittances affordable as well as creating new forms of digital identity.

Yet, none of this would be possible without the growing ecosystem of mobile money API platforms that interconnect all of these digital products and services.

To get the pulse on how these innovative platforms are engineering economic expansion globally, Doing Business breaks down the significance of Mobile money APIs particularly for local businesses and entrepreneurs.

An Application Programming Interface (API) is a piece of software that creates a link between applications.

In that regard, mobile money APIs are software that connect digital payment platforms with telecom networks.

"This benefits the user because they no longer need to manage vast telecom networks and bank accounts.” Said Lambert Rulindana, a software developer.

Dare Okoudjou, CEO and Founder of MFS Africa, one of the continent’s leading API providers, used a light bulb and an electric socket analogy.

"Customers don’t need to worry about who made the socket or how the socket gets electricity. They simply need to buy a light bulb that fits in that socket.”

 "APIs work pretty much the same way. With mobile money, for instance, APIs allow developers to completely ignore how the payment part of the process will work and simply rely on just getting the right light bulb [in this case, their platform] to fit into the socket,” Okoudjou told Reloadly, a tech site.

In business terms, Rulindana explained that if a charity organisation in Dubai wants to make transfers to say teachers in Rwanda, the use of mobile money APIs can help.

He said that by linking their platform with an API, they connect to a number of different mobile money providers in Rwanda. "The charity will thus no longer need to concern itself with individual account information.”

Common use cases for mobile money APIs

Mobile money APIs cover various specific functions. However an average online transaction will include several mobile money APIs. 

According to Rulindana these all execute distinct functions that the end-user experiences as a single action.

The end-user’s experience with mobile money APIs usually involves the two most common APIs: debit APIs and credit APIs, which allow customers to collect and pay-out money, respectively.

These are the two sides of the payments coin in mobile money transfers. But this activity needs to be managed, which is where account verification APIs enter the process. This API will carry out security checks, such as ensuring that the recipient is linked to an active mobile money account.

Within the mobile money ecosystem, Okoudjou points out that, it is best practice to build a standardized API on top of the industry’s core APIs, aggregating debit, credit, account validation in one place.

This, he said, creates harmony within the customer’s business interactions.