Implications, insights and guidance on use of Open Application Programming Interfaces (APIs) by financial services providers in emerging economies

March 25th, 2016

While Safaricom’s M-PESA platform stole the spotlight for being one of the world’s most transformative financial services, a somewhat hushed storm is infusing in the world of API’s in Kenya since Safaricom’s September-2015 announcement   that they have opened up their APIs to the public.  APIs are the set of procedures, rules, and tools that stipulate how a developer’s software components should interact with the platform to access M-PESA services.

Following this announcement, it will only be a matter of time before other FSPs also release their APIs. Although there may not be any local providers to benchmark Safaricom, there is much to learn from international providers such as Paypal, Google, and Stripe who have been very active in the API space.

The benefits of such openness and connectedness are clear:

1. FSPs benefit from the efficiency and added growth potential from the broader ecosystem
2. Organizations can focus on their core competency by leveraging the services of others with different specializations.
3. Customers can potentially access a wider range of applications suitable for their needs and at reduced costs from resulting efficiencies.

Done properly, it really is a win-win for all. But, there is a caveat; how open must an API be to allow users to tap into these benefits? The M-PESA API provides a useful case study. Its API functionality is currently limited and doesn’t allow for seamless integration. Thus, to link onto it, one must first pitch their business to Safaricom for approval. Resultantly, some have disparagingly dismissed this as a sheer response to pressure on the organization for interoperability and integration of M-PESA platform with other market players. Optimists on the other hand have remarked that the risks associated with such platform-based economies must be viewed in tandem with perceived benefits. Hence the cautious route Safaricom has taken.

While much of the focus so far has been on publishing API’s and making them public, equal attention should be paid on the functionality of public API’s to potential consumers. Thus, although M-PESA’s “public”- not “open” – API dominated the headlines, creating a seamless experience is the smart feature with potential to drive real transformation. Of course, developers and start-ups can continue leveraging the platform via stopgap solutions such as pesapi that they are used to, but a truly open API is will create better experiences and open up more opportunities for innovation around key decisions that have financial implications.

What’s clear from this paper is that APIs are strong enablers for both providers and consumers. More importantly, what the developer community needs to support great products, wider spread innovation, and faster time to market is a set of fully open API features with features as standard as the USB connector or even a power socket.

The paper offers further insights from major market players and examines potential steps toward the creation of new opportunities as providers prepare for this journey for openness and interconnectedness.

The full report is available for download here.


Bankable Frontiers Association. (2016). Implications, insights and guidance on use of Open Application Programming Interfaces (APIs) by financial services providers in emerging economies. Nairobi, Kenya: FSD Kenya.



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