Memories from the 2023 Summit!
Brief Project Description
The purpose of the grant is two-fold: integrating Mozrt to Rafiki, and exploring the need to charter a bank to serve ILF community members.
Mozrt Bank aims to become an open payments and deposit bank leveraging the Mozrt technology API core to advance tech-forward fintechs and corporations.
Our mission is to provide accessible, affordable, and responsible financial services to create opportunities for fintechs, as well as individuals who are underserved by the existing financial system
At the conclusion of this grant, we have come to believe that the best way to serve the Interledger Community at large is by truly understanding the needs of the Interledger community. In our update here, we’ll talk about our findings as regards the diversity of the Interledger ecosystem, our ideas for next steps for the protocol itself, and finally, how we propose to bring Interledger to a greater number of companies and people throughout the world.
Project Update
Our project so far has been an engaging experience, and has allowed us to truly dive into the Interledger world. Some of the highlights of the last four months include:
We have completed our creation of a local Rafiki instance. We are now one of two organizations able to do this. Please see “next steps” for how we can take this partnership to the next level.
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We have completed an extensible interface that demonstrates our API’s capabilities. This is a UI that makes it easy to send payments via Interledger pointer. The functionality that we have built includes:
- A UI that can be customized on a per-client basis
- Users can select different payment methods, with Interledger payment pointers featured as a first-class payment method, on par with ACH, SWIFT, Fedwire, etc. with no additional restrictions.
- Users can send money via payment pointer, ACH, or Fedwire
- Users can create beneficiaries as Interledger-enabled. This means that for users who have their intended recipient’s payment pointer, they can send money as easily as pressing a button.
- Users can screen interledger entities in line with regulatory and compliance standards. This means that users can be compliant with regulatory standards across the globe, avoiding fraud or compliance issues, and ensuring safe transactions.
- We have enabled all Mozrt-ecosystem entities so that they are automatically assigned a payment pointer. This means that any client of Mozrt is immediately a part of the Interledger community.
- Through the Mozrt banking rails, funds sent via Interledger are deposited into the client’s bank account and available immediately.
- Clients may customize their payment pointer
We have undertaken various marketing initiatives, including social media posts and boosts.
We have done extensive research on the needs of the Interledger community (the results found below).
We have begun the process of consulting with knowledgeable partners to start the work of chartering a bank.
While the above points describe the overall work we accomplished in our Interledger integration, we believe that our research and discovery around the protocol, its adoption, and common challenges the Interledger community faces when adopting the ILP is of the most value. This information has informed what we believe should be the next steps for Mozrt, and what we believe will be of the most help to the community at large to improve adoption and spread of Interledger open payments.
What we found:
Interledger community members are incredibly diverse in almost all aspects, from geography to vertical.
Interledger is truly global. We have spoken with companies in North America, Latin America, Africa, Asia, Europe, and South America. Each of these regions has different requirements, practices, cultures and needs. Compounding this complexity is the incredible range of verticals that Interledger supports. From crypto to traditional wallets, from web monetization to government grant platforms, the Interledger community is truly universal, and is unmatched in its ability to meet users “where they’re at.”
We’ve had extensive conversations with the community, and have compiled information from many user interviews. What we have found is, we believe, the key to making Interledger even more successful and widely adopted. We’ve distilled these recommendations down to points here:
- Peered Rafiki Node
- Global payments coaching and US-specific payments coaching
- Compliance support
- ILP Operational Recommendations
- Wider banking availability
As we’ll describe below, Mozrt is excited to be able to provide some of the coaching and proposed direction to help these Interledger organizations continue on the path to true open payments and global adoption
Project Impact & Target Audience(s)
Our project has had interest from many corners of the world!
We’ve had very interesting conversations with ILF, and ecosystem participants including Gatehub, JoPACC (Jordan Payments and Clearing Company), Chimoney (now a client!), Fynbos, Cheeri, SpendtheBits, BessPay, SmarterLicense, AgnostiPay, and People’s Clearinghouse about how we can work together to connect their products to global banking.
We’ve been able to provide guidance on the complex banking landscape, as well as work together to plan on how we might solve some of the toughest challenges when entering the US banking market. We look forward to helping out Interledger community members with all of their banking landscape questions and concerns.
Progress on Objectives, Key Activities
We have made incredible progress on our objectives, with key accomplishments outlined by month here.
Accomplishments
Month 1 August
Initial Design and integration plan complete.
Discovery sessions begun.
Conversations with ILF engineers (Sabine) complete.
MFX UI with payment pointers development begun
Charter - Initial investigation complete
Month 2 September
Rafiki-Mozrt Integration - Planning complete, Discovery complete. Integration begun.
MFX UI with payment pointers development continues
Conversations with Fynbos Rafiki developers underway.
Charter - In-depth conversations with advisors at the federal reserve and FDIC. Introductions and initial conversations with specialized accounting and legal firms to explore potential acquisition targets.
Month 3 (October)
Rafiki-Mozrt Integration - Technology integration continues. Testing sessions begin.
Demo of MFX UI with payment pointers ready
Month 4 (November)
Progress Report complete
Interledger Summit attended
Demo and explainer complete: https://www.mozrt.com/interledger
Rafiki-Mozrt - Technological integration in progress
Rafiki-Mozrt - Testing phase begun
Month 5 Onward
Engaging with numerous companies in the Interledger ecosystem revealed their diversity in geography, business models, and focus. Through in-depth discussions with a number of these companies, Mozrt identified common challenges with U.S. banking, such as long timelines (measured in many months to years), unclear compliance requirements, limited products, opaque decision-making, and limited support. We have done deep discovery on what kind of solution might resolve these issues and offer the Interledger community a clearer, simpler way forward. We outline below in the “What’s Next” section our ideas around a multi-bank solution that could make the ILP even better than it is today.
Communications and Marketing
A demo of our services is here, envisioned as a simple UI over our API capabilities: https://www.mozrt.com/interledger
What’s Next?
We are looking forward to continued discussions with regulators, banking attorneys, and more for Mozrt Bank, getting our Rafiki node peered, and sharing our experience with the community.
Additionally, our deep dive into the ILF community needs has led us to what we believe would propel the ILP to even greater heights - a peered node, ongoing coaching, compliance assistance, and ILP roadmap, and a multi-bank strategy.
Stand up Rafiki
The Interledger Protocol is intended to create an open and inclusive network for sending payments anywhere in the world, regardless of the underlying infrastructure or currency used. In order to achieve that goal, the most important next step is peering Rafiki instances.
Mozrt has stood up its Rafiki instance, and is excited to peer this node to prove out this next step of Interledger Protocol viability. Whether it is a hackathon, a strategic meeting of node-partners, or a virtual gathering, we believe it is vital to create dedicated time and resources for these nodes to begin communicating.
Global and US-centric Payments Coaching
The world of global payments is exceptionally challenging for every business, large and small. From navigating an array of payment methods to understanding complex regulations and security protocols, the landscape is fraught with intricate details, rules, and “gotchas.” Every business, regardless of its size or industry, must grasp this ecosystem to thrive. Expertise in payments isn't just a luxury—it's a necessity for success. It's about more than just processing transactions; it's about safeguarding sensitive data, optimizing revenue streams, and fostering customer trust. In this dynamic and complicated environment, those who lack the expertise to navigate the complexities risk falling behind. Businesses must invest in understanding the nuances of payments to stay competitive and secure their foothold in the ever-evolving marketplace.
Mozrt maintains relationships with partners across the ecosystem, and is considering offering a suite of written resources to help young companies navigate the complexity. Additionally, we may offer global payments coaching to Interledger community members, as this is an area Mozrt can assist with. We believe that sharing information about the complicated world of global payments is an ideal way to ensure that the community has the right resources the first time, and focuses business energy on initiatives that make sense, and are well-informed about this ecosystem.
Compliance
In all money-moving businesses, compliance is the key to success. The most successful protocols and standards ensure compliant processing, and put regulatory adherence at the forefront of the work. The Interledger community could benefit greatly from a “plug-and-play” compliance solution.
Recognizing the importance of compliance (as well as its complexity!), Mozrt is developing a way for Interledger-enabled transactions to undergo industry-leading screening and monitoring. This will ensure that the ILP community complies with all relevant regulatory requirements and standards, that the group at large not only understands, but stays in front of legal implications and compliance obligations for sender, receiver, and enabler.
ILP Operational Recommendations
The goal of Interledger is to create an open and inclusive network for sending payments anywhere in the world, regardless of the underlying infrastructure or currency used. We have put together our understanding of where Interledger sits in the world of major online payment protocols so as to identify areas where Interledger can become even greater and more inclusive. You can find that here.
The most pressing features in our opinion include messaging, recalls, and consumer recourse. Adding these features will allow the ILP to exceed the standards put in place today by major, non-open players, and put Interledger at the forefront of global protocols. We are so excited to be a part of the Interledger community, and believe that work on these aspects of the protocol will help community members see even wider adoption and interest.
Wider Banking Availability/Mozrt Multi-bank Strategy
Recognizing the diverse risk appetites and specializations within the banking sector, Mozrt believes that its work on a multi-bank strategy as a key focus could help the Interledger community go even further than it has already gone and reach even more people across the globe.
In the banking sector, institutions exhibit distinct risk appetites, areas of expertise, and fields of interest when engaging with fintechs. Regional or community banks may focus on specific industries within their geographic footprint, tailoring their services to local businesses and industries. Some are inclined towards innovation and technology-driven solutions, attracting partnerships with cutting-edge fintech firms. Each institution's risk appetite, specialization, and strategic priorities play a pivotal role in shaping the nature of their partnerships and interactions with businesses and fintechs.
For example, while one bank may focus on crypto, another may avoid crypto entirely. Another bank may specialize in cannabis, and yet another in complex financial instruments. Each bank is as unique as the businesses looking to work with them.
Mozrt’s proposed multi-bank strategy will allow Mozrt to act as a hub for multiple banks to connect with Interledger-enabled businesses. This model provides extreme flexibility in an industry that’s traditionally incredibly rigid. As one bank may change its risk tolerance and throttle transactions from a business, another bank is available for the traffic.
Mozrt also provides risk management frameworks and expertise for businesses attempting to navigate complex financial environments. By leveraging our expertise and experience, businesses are able to board more quickly and efficiently with banking partners, as well as take advantage of the flexibility on the back end banking infrastructure of the Mozrt technology system. The approach allows for a fintech company to integrate “once” to the Mozrt platform and have access to multiple banks that can better support the needs of the fintech and provide redundancy.
With one simple integration to Mozrt, the companies that struggled to board with a single bank will have the pre-set compliance and regulatory structure, as well as the pre-set integration that will give them lightning-fast access to global banking.
Community Support
We’re excited to stay involved with the Interledger community and help to make financial inclusion a reality. We believe that the information put forward here, if acted upon, will mean greater adoption and utilization of the Interledger Protocol!
Steps to success
- Peering Rafiki node to prove out the ILP concept fully and begin communicating across organizations
- Providing ongoing coaching on payments to the community to provide expertise on a complex environment
- Creating a plug-and-play compliance module to speed up implementation and stay ahead of regulatory concerns.
- Developing the protocol even further to exceed functionality of other options
- Using a multi-bank strategy to onboard the greatest number of IL-enabled companies
We are looking forward to continued discussions with regulators, banking attorneys, and more for Mozrt Bank, getting our Rafiki node peered, and sharing our experience with the community.
Additional Comments
We are grateful for the opportunity to work with the Interledger community, and are excited for what the future may bring!
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