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At Dwolla, we have the opportunity to solve for difficult problems and deliver amazing products every day.

A few years ago, we were approached by the foundation to assist in building something ambitious—an open-source code for creating an interoperable payments infrastructure that could be leveraged by developing nations.

Today, we’re thrilled to share with you what came from that ambitious idea. Announcing Mojaloop, a completely open-sourced solution.

The teams from Crosslake Technologies, ModusBox, Ripple, Software Group, and Dwolla have come together, with support from the Bill & Melinda Gates Foundation, to create the software for a real-time payments system that can be adapted to serve different countries and customers.

In this blog post, we’ll explain why we found contributing to this project so necessary, and we’ll outline Dwolla’s specific contributions to the project.

A Brief History of the Project

In 2015, the Gates Foundation started with a vision for “designing a new system for financial inclusion.” It was an aspirational endeavor focused on helping the less fortunate across the globe.

In order to accomplish their mission, the foundation published a series of design principles that would shape the open-source payments project and act as a call to action for collaboration across organizations. The design principles include:

  • A push-payment model with immediate funds transfer and same-day settlement
  • Open-loop interoperability between providers
  • Adherence to well-defined and adopted international standards
  • Adequate system-wide shared fraud and security protection
  • Efficient and proportional identity and know-your-customer (KYC) requirements
  • Meeting or exceeding the convenience, cost, and utility of cash

With these principles in mind, the Gates Foundation set out to harness the power and sophistication of a real-time payments system and make it available to financial institutions and commercial providers (e.g. telcos) in developing countries.

Furthering the Mission

Once the development team was assembled, we started the project by understanding how individuals in developing nations currently facilitate payments. This baseline understanding was necessary for moving forward on the problems we were trying to help solve.

Looking back, the breadth of knowledge shared throughout this project is impossible to briefly summarize.

After countless calls, work-sessions, and meetings, the release of the final open-sourced solution today is a true victory for the development of global payments. The adaptability offered by the project evens the playing field, so everyone can benefit from the sophistication of a ubiquitous payments infrastructure.

It’s hard to effectively convey the amount of appreciation we have for this work and the expertise of those who contributed to it.

All we can say in a simple blog post is thank you; thank you to everyone who helped us learn, grow, and deliver a great product!

Dwolla’s Involvement

At Dwolla, we saw this project as an excellent opportunity to contribute and share our knowledge and experience building in the fintech space. The potential to positively impact the future of payments on a global scale was captivating.

You might be asking yourself,Why Dwolla?”

In recent years, our focus has been on providing our Dwolla customers the best solutions and experiences. So how could a B2B, SaaS company provide value to an international payments landscape?

Our involvement in the project focused on leveraging two distinct facets of knowledge:

  1. Considering our Fast Payments Proposal–leveraging the ideas serving as the cornerstone of the proposal Dwolla submitted to influence the United States payment infrastructure in 2016.
  2. Channeling lessons learned from building Dwolla–learning from our customers to determine how to build a developer-friendly API, critical for an open-source community.

Leveraging Dwolla’s vast experience in payment solutions, our contributions focused on the elements referred to as the ‘Central Services’ of the project.

This series of services focused on building an interoperable system of record that would essentially serve as a clearinghouse for the entire system. The Central Services were comprised of four elements: the ledger, the directory, fraud sharing services, and forensic logging.

The Ledger

In any payment system, the most critical element is the ledger. A ledger is the system of record for funds transfers, ensuring the appropriate amount is sent from one end-user to another.

At Dwolla, we have spent the better part of a decade creating and fine-tuning our ledger. We leveraged this experience by creating a sophisticated ledger for the project with elements that are essential to an international economy:

  • Facilitates clearing funds between providers in real-time
  • Maintains positions for a deferred settlement
  • Collects centralized fees
  • Promotes inclusion via interoperability and flexibility

The ledger is the core of any real-time payments solution.

The Directory

User discoverability provides a unique challenge in the current payment landscape. How do customers on one solution find others across a different platform? The central directory focuses on how to leverage existing rails enabling providers to discover users across the world.

The directory allows providers connected to the system to find other end-users by a phone number or an end-user number. The phone number resolution allows a sender to type in a phone number and send funds to another person regardless of which provider they utilize.

The directory was designed with flexibility in mind, allowing the community and implementers to expand and include other identifiers as they see fit moving forward.

Fraud Sharing

Real-time payment systems provide a convenient experience for all users. Developing a solution to protect users from the unique risks of a new platform required the team to think about fraud detection differently. In the project, our approach was to build a centralized framework for all participants to promote the recognition of fraudulent activity.

The fraud sharing service is the foundation to promote the overall health of the payments scheme via fraud protection. The fraud sharing service remains adaptable in order to incorporate different rules and solutions customizable to the needs of the governing bodies and participants.

The foundation of the fraud sharing services is a scoring-based system, which all participants can easily access to empower them to reduce the occurrence of fraud.

Forensic Logging

How do you ensure the confidentiality and integrity of audit events across a vastly distributed payment system?

The team created a forensic logging system that combines distributed logging with a centralized key management system. The blend of dispersion and centralization makes this logging mechanism able to transcend technologies far beyond real-time payments. It leverages best practices from the security community such as key management and cryptographic protection to ensure integrity across the system.

The events captured across the implementation can help reduce the impact of one bad actor causing issues for all participants in the open-source solution.

Other Involvement

In addition to building the central services, the Dwolla Team’s knowledge and experience were a shining light throughout the project.

Truthfully, our passion towards payments and payments inclusion allowed us to represent our portion, and the Gates Team, in various capacities. Throughout the delivery, our expertise was critical in influencing the following:

  • Real-time Clearing and Settlement
  • Fraud Detection
  • Information Security
  • Engineering practices
  • Agile practices

A once-in-a-lifetime opportunity, Dwolla has been fortunate over the past two years to have worked alongside the brightest of minds in philanthropy, payments, and technology–all while working towards an aspirational end goal. The project team came together to form a “dream team” of payments technology.

After numerous hours, days, and months of hard work, we’re proud to share the result with you. Being part of something special and impactful, while leveraging our amazing team’s expertise is an opportunity I will personally cherish for my entire life.

As an organization, we are excited to see where the Gates Foundation and the open-source community, continues to strive to find a payments solution for the betterment of the global economy.


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