The Interledger Community 🌱: Roberto Valdovinos

People's Clearinghouse — ILF Grant Final Report

Roberto Valdovinos — Tue, 31 Mar 2026 19:21:03 +0000

Brief Project Description

People's Clearinghouse (PCH) is a digital payments platform designed to interconnect community banks and savings cooperatives in Mexico, among themselves, with the national financial system, and with international networks for account-deposited remittances. Built on the basis of open-source technology (Rafiki, Mojaloop, ILP), PCH is led by the Mexican Association of Social Sector Credit Unions (AMUCSS), an organization with four decades of experience building community-owned financial institutions in rural and indigenous regions. By routing remittances directly into community bank accounts rather than into cash, PCH aims to create a virtuous cycle: more local capital, more credit for productive projects, less inequality, and less forced migration.
For context on our earlier milestones, read our Progress Report #1.

Project Update

The arc: January 2024 to March 2026

When we signed with the Interledger Foundation in January 2024, we had a clear idea, a strong team of social finance leaders, a fresh cohort of eight young developers recruited mainly from the Technological University of the Mixteca in Oaxaca, and a simple prototype of the Cross-Network Provider (CNP), the connector that translates Rafiki cross-border transfers into the PCH switch format that community banks would connect to. What we didn't have was a production system. Or a mobile app. Or real integrations with core banking software. Or a connection to SPEI, Mexico's national real-time payment network. Or a production-grade infrastructure. Those are the things we built over the following two years.
It was a longer path than we anticipated because we had to adapt all our platform to a very specific regulation set by the Central Bank. And also because as we went deeper into the communities, we realized the scope of what "real financial inclusion" actually demands. A clearinghouse that connects financial institutions is not enough. You also need the institutions' clients to have a way to interact with their accounts digitally. And for that you need a mobile application. And for that application to be useful (rather than immediately abandoned for cash) you need AML compliance, settlement reports, fees management, QR payments, push notifications, a PISP security architecture. Each of these components was built, tested, demoed, and refined.
The grant was extended to support the final sprint toward a fully operational platform: SPEI integration, core banking system integrations, production deployment, and the live demo at the 2025 Interledger Summit in Mexico City.

The capstone: the live demo at ILF Summit 2025

The Interledger Summit in November 2025, held in the heart of Mexico City, was the moment everything came together. We presented on the main stage in front of an international audience, and then, live, we ran intra-clearinghouse and CNP-to-clearinghouse transactions.
We showed a Rafiki remittance launched from the ILF test wallet. Within milliseconds, the phone lit up: 223 Mexican pesos received, with a push notification showing the sender, the amount, the transaction ID, and a QR shareable receipt. Then we switched to the PCH mobile app and did a P2P transfer between two accounts on the switch (scanning QR code and with an instant audio notification). Then a merchant scenario: request-to-pay, pre-filled amount, biometric confirmation, instant settlement. Right after the demo, the audience of 200+ people downloaded the PCH demo app and were paying community producers from Oaxaca, Pahuatlán, and elsewhere who had come to the Summit to sell their crafts, using virtual balances topped up with Rafiki remittances from the ILF and PCH teams.
Behind each of those transactions ran a real-time AML engine inspecting every transfer in under a second, a gRPC-based switch routing funds through a modular bounded-context architecture, a PISP layer securing the mobile connection with public-key cryptography, and a compliance dashboard generating regulatory PDF reports with one click (the same reports that may have taken a money transmitter hours to produce manually).
The presentation also included a reference to a future development: a working offline payments prototype. Along many visits to rural communities we had realized that the internet is very unstable and that a successful digital payments network that impacts these regions requires new forms of connectivity.
The presentation closed with the entire PCH development team standing on the main stage in front of their work. Most of them had never imagined being there when they started their training on Rafiki and Mojaloop two years earlier in Oaxaca.

A reflection: from clearinghouse to full digital ecosystem

One thing changed significantly over the grant period, and it's worth being honest about it: our conception of what PCH needs to be.
We started with a clearinghouse: a technical infrastructure for routing transfers between financial institutions. That remains the core. But through community visits to places like Ejutla, San Pablito and Pahuatlán, we understood that connecting institutions is not the same as including people. If a community bank receives a real-time remittance but its clients still have to take a six-hour round trip to check their balance, nothing fundamental has changed in their lives. So we first built a Whatsapp payment bot solution, and then, after a series of discussions with the Central Bank, a mobile application so that the main payment channel would be entirely under our control. In building it, we had to build the PISP model (with its consent token architecture), all so that someone in a rural market could check their balance or pay for tortillas without touching a bank teller or having to take a bus.
This deeper scope is why the timeline extended, and we think it was worth every extra month.

Technical deliverables: completed

By March 2026, all four deliverables defined in the grant extension have been achieved:

Rafiki/CNP cross-border scheme: complete. The CNP is fully production-ready: it handles ILP routing from a US-based Rafiki wallet to a Mexican community bank account, performs real-time AML inspection, manages FX rate integration, produces compliance reports, and exposes an operator admin portal for liquidity management and reconciliation. The CNP architecture has been refined since the first successful demo in August 2024, now including idempotency, error handling, and a complete transfer lifecycle model that keeps Rafiki and PCH in sync.
Production deployment: complete. PCH's infrastructure runs on Google Kubernetes Engine (GKE) on GCP, with managed services for databases (Cloud SQL, Firestore), messaging (managed Kafka), security (GCP KMS for certificate management), and observability (Prometheus, Grafana, Elasticsearch/Kibana). CI/CD pipelines automate testing and deployment. Backups are retained according to Central Bank requirements. The environment was stress-tested with 200+ simultaneous users during the ILF Summit demo before being hardened into the current production configuration. A walkthrough of the production environment is available.
SPEI integration: complete. PCH can now send transfers to any account in Mexico's national financial system. The integration uses a Hermes, deployed in PCH's own environment, which is a SPEI gateway provided by Conecta, one of the main SPEI specialists in the country. When a user sends money to a phone number that doesn't belong to a PCH participant, the switch automatically looks up the recipient's CLABE through a Central Bank service and routes the transfer through SPEI. From the user's perspective, the experience is identical to an internal transfer. A demo of this integration is available.
Core banking system integrations: complete. Two CBS integrations are now production-ready. Mifos, an open-source core banking system with broad adoption among social financial institutions, was the first to be fully integrated, with a reusable gRPC client library published in a public GitHub repository. This effort was possible through the invaluable work of Fintecheando, a main tech actor in the Mexican fintech ecosystem. The integration was showcased at the Interledger Summit 2025. Sinefi, a core banking system used by approximately 25 financial entities serving around one million clients in Mexico, was integrated second, with its CEO participating in the final integration demo. Both systems authenticate to the PCH switch using certificate-based mutual TLS, follow the same gRPC synchronous connection protocol, and can perform lookups and fund transfers in real time. The expertise acquired in the process means that onboarding additional CBS providers now requires far less custom development. Demos of the Mifos integration and the Sinefi integration are available.

Authorization process: at the threshold

The Central Bank authorization process has been one of the longer threads of this journey, and one that has required us to stay close and responsive to regulatory feedback at every stage. The good news is that every required element is now in place: the switch software meets all regulatory requirements, the operational documentation and compliance manuals have been updated to reflect the final architecture, and the formal submission package is complete. We are, genuinely, at the threshold of a new phase. Our expectation is that PCH will receive its clearinghouse authorization and be ready for launch by the summer of 2026.
When that happens, our intention is to reach several hundred thousand customers through our partner financial institutions (AMUCSS' network of 140 community banks, four of Mexico's five largest savings cooperatives, and Sinefi's network of 25 financial entities) before the end of the year. For most of those customers, it will be the first time they have had access to digital payments, real-time transfers, and account-deposited remittances. That is the moment the entire project has been building toward.

Project Impact & Target Audience(s)

PCH exists because certain communities have always been left out of the equation, not by accident, but by design. National banking systems optimize for scale and profitability. Rural communities, indigenous regions, and the migrants who send money back to them don't fit that model. PCH is built specifically for them.

The communities and their financial institutions

The most direct beneficiaries are the members of the social financial institutions that PCH connects: AMUCSS' network of 140 community banks, four of Mexico's five largest savings cooperatives, and Sinefi's network of 25 financial entities. Together, these institutions serve several million individual account holders in rural, semi-rural, and peri-urban regions across Mexico, predominantly in areas where commercial banks are absent or inaccessible. In the near term, these are the people PCH will serve at launch.
Looking further, the social financial sector as a whole (savings cooperatives, community banks, and social-purpose financial institutions) counts some 17 million users across Mexico. PCH is built to serve all of them over time, as a sector-wide shared infrastructure rather than a product for any single institution.
Two thirds of AMUCSS' users are women. Many are speakers of indigenous languages (Zapotec, Mixtec, Nahuatl, and others) in communities where cultural and linguistic barriers compound the financial ones. Many are the wives, mothers, and daughters of migrants working in the United States, managing household economies that depend on remittances arriving in cash, at significant cost and risk. For them, the difference between a cash remittance and an account-deposited one is not a technical detail. It is the difference between money that arrives safely, is captured by a local institution that can lend it back productively, and multiplies, versus money that arrives in an envelope, gets spent immediately, and leaves no trace in the formal financial system.
PCH's design reflects these realities. The platform already supports multilingual interfaces and at launch will include indigenous-languages. The mobile application is designed for low-connectivity environments (because a payment platform that only works on a strong LTE signal is not a platform for Oaxaca's mountains or Puebla's high valleys). The switch connection protocol was engineered for resilience on unstable internet lines, with automatic reconnection, because many community bank branches operate on basic subscriber lines that go down. And the offline payments prototype will be developed too, aimed squarely at communities where the internet does not reach at all.

The migrants

On the other side of the transfer flow are the millions of Mexican migrants living and working in the United States, the largest remittance corridor in the world, with over $60 billion USD sent annually. Today, most of those transfers arrive as cash, delivered through agents, at fees that eat into money that families need. PCH's CNP offers a path toward account-to-account remittances via Rafiki, directly into the recipient's community bank or savings cooperative. The Mexican migrant in the US can use a Rafiki-compatible wallet. Their family in Oaxaca or Hidalgo receives the funds in their account, in seconds. No cash agent. No distance-based fee. No trip to town.
This is not a marginal improvement. It is a structural change in how remittances work and in what they can do for the communities that depend on them.

The developers

One impact of this project that is easy to overlook, but worth naming, is what happened to the team that built it. Eight young developers were recruited from local Oaxaca universities in indigenous regions through a rigorous selection process that prioritized strong coding skills, English proficiency, and genuine commitment to social justice. Most of them had no prior exposure to ILP, Mojaloop, or Rafiki. Over two years, they became the heart of the project. They even contributed pull requests to the Rafiki repository. They debugged the vNext Mojaloop switch alongside its original architects. They presented their work at international summits in Cape Town, Cluj and Mexico City. They stood on the main stage at the 2025 Interledger Summit in front of an audience from around the world.
We believe this matters: not just as a feel-good story, but as a model. An innovative fintech ecosystem does not need to be built only in San Francisco or London or Singapore. It can be built in Oaxaca, by people who have a direct stake in the communities the technology is meant to serve.

Alignment with the Interledger Foundation's mission

PCH is the ILF mission made concrete. It is built on the basis of open standards and open-source software to move value across networks that previously could not communicate. It prioritizes the populations most excluded from existing financial systems. And it demonstrates that ILP-based technology is not only viable for global finance: it is specifically well-suited for the places global finance has forgotten. The communities that will benefit from PCH are exactly those the ILF exists to reach: women, indigenous communities, rural populations, migrants, and the institutions that have chosen to serve them for decades, without waiting for the market to catch up.

Progress on Objectives, Key Activities

The CNP: Rafiki-to-PCH bridge

The Cross-Network Provider was PCH's original technical bet: the idea that a single entity could sit between the Interledger network and a Mojaloop-based clearinghouse, translating the language of one into the language of the other. By the summer of 2024, the CNP was working: a Rafiki transfer initiated from a US-based wallet could reach a community bank account in Mexico, end to end, passing through the CNP and the PCH switch. We demonstrated this live at the Oaxaca Workweek in August 2024 and again at the Interledger Summit in Cape Town in October 2024 (the first public proof that this kind of cross-network bridge was not only theoretically sound but practically buildable).
Since then, the CNP has grown considerably. The core architecture remains: Rafiki on the Mexican side receives the ILP transfer, the CNP backend processes it, the PCH switch routes it to the right participant, and the community bank credits the recipient's account. The CNP also handles real-time FX rate queries, idempotency logic to prevent duplicate transfers, a complete error-handling model that keeps Rafiki and the switch in sync even when things go wrong on one side, an operator admin portal with liquidity dashboards and reconciliation tools, and automated compliance reports that previously required hours of manual work. What was a working prototype in 2024 is now a production-ready system.

The switch: building on Mojaloop

The PCH switch — the clearinghouse hub that routes transfers between participants, manages the position ledger, and handles settlement — is built on Mojaloop vNext, the next-generation version of the Mojaloop open-source payment switch. The decision to use Mojaloop was one of the best we made: it gave us a mature codebase, detailed technical documentation, an active global community, and direct access to the people who built it. The support we received from so many people and organizations familiar with Mojaloop vNext has been foundational.
We took the Mojaloop vNext switch and adapted it significantly for PCH's specific regulatory and operational context. Settlement logic, fees management, and compliance reporting were either absent or insufficient in the open-source version: not because Mojaloop neglected them, but because they depend on the specifics of each jurisdiction's financial regulation. We built them for Mexico, for the Central Bank requirements, and for the practical realities of small financial institutions. We also introduced a synchronous gRPC connection model that allows community banks to connect to the switch without implementing a full asynchronous message queue (a practical necessity given the technical resources available at these institutions). We also took advantage of the switch's architecture around bounded contexts, making the codebase modular enough to evolve quickly without breaking existing functionality.

Core banking system integrations

Connecting the PCH switch to a core banking system (CBS), the software that a community bank or savings cooperative uses to manage accounts, transactions, and clients, is the step that makes the platform real for participants. Without it, the switch has nowhere to route funds.
PCH uses gRPC as its integration protocol: a high-performance, contract-based remote procedure call framework developed by Google that uses Protocol Buffers for serialization. It is fast, secure, and built for bidirectional streaming. As such, it seems a good solution for a payment switch that needs persistent connections with participants. The challenge is that gRPC is essentially unknown in the Mexican financial sector. Every integration has had to begin from scratch: explaining the protocol, walking technical teams through the connection model, explaining client libraries, debugging certificate-based authentication flows, and running joint tests before the first successful lookup could be made.
That investment is now paying off. Mifos (an open-source CBS with broad adoption among social financial institutions globally) was the first to be fully integrated, with a reusable TypeScript gRPC client library published in a public repository. Fintecheando, a key partner in the Mexican fintech ecosystem with deep Mifos expertise, was essential to making this integration happen. Sinefi, a proprietary CBS used by approximately 25 Mexican financial entities serving roughly one million clients, was integrated second, with Sinefi's CEO participating directly in the final demo and validating the result.

SPEI integration: connecting to Mexico's national payment network

SPEI, Mexico's real-time gross settlement system, operated by the Central Bank, is the backbone of the country's financial system. Any payment that needs to reach a bank account outside the PCH network has to go through SPEI. Getting there required not only a technical integration but a careful architectural design, because SPEI is an RTGS system (settling each transaction individually and in real time) while PCH operates as a net settlement platform, a fundamental difference with regulatory and operational consequences that took months of analysis and design sessions to resolve properly.
The integration was made possible through close collaboration with Conecta, one of Mexico's leading SPEI specialists and the provider of Hermes, the SPEI integration platform deployed in PCH's own environment. Conecta's team held weekly sessions with PCH's developers throughout the integration process, clarifying SPEI's operational logic, validating the transfer flows, and helping navigate the certification requirements. Their knowledge saved PCH an enormous amount of time that would otherwise have been spent reverse-engineering a regulatory system from documentation alone.
The result: when a PCH participant's client sends money to a phone number that doesn't belong to a PCH participant, the switch queries the Central Bank’s CLABE registry to retrieve the recipient's bank account identifier, formats the request according to SPEI's specifications, routes it through Hermes, and receives a webhook confirmation from the Central Bank when settlement is complete. From the sender's perspective, it looks exactly like any other transfer. Behind the scenes, it reaches any bank account in Mexico.

Production environment: built for the Central Bank

The infrastructure that runs PCH is not the same infrastructure that ran the 2024 demo. After the November 2025 ILF Summit, which stress-tested the system with over 200 simultaneous users in a live public setting, the team spent three months rebuilding the environment from the ground up according to Central Bank requirements and Kubernetes production best practices.
The current production environment runs on Google Kubernetes Engine (GKE) on GCP, with managed services for all critical components: Cloud SQL and Firestore for databases, managed Kafka for messaging, GCP Key Management Service for certificate creation and storage, and a dedicated observability cluster running Prometheus, Grafana, Elasticsearch, and Kibana. CI/CD pipelines automate building, testing, and security scanning end to end (a code change triggers a build, a security scan, a deployment, and a Slack notification); deployment to the production environment includes a manual approval gate as required by security policy. Backups are generated daily and retained on a schedule that meets the Central Bank's specific archiving requirements. Pod security policies enforce least-privilege principles throughout the cluster.
Every architectural decision has been made with the authorization audit in mind. The documentation that accompanies the technical build is as complete as the system itself.

Mobile app and PISP: banking for institutions without apps

The majority of community banks and savings cooperatives in Mexico do not have a mobile banking application. Building one is expensive for a small financial entity, requires technical teams they don't have, and requires regulatory approvals they'd need years to obtain. PCH's mobile app solves this problem simply: it connects not to the bank but to the PCH switch, which connects to the bank. Any institution that joins the PCH network gets a branded mobile banking experience for its clients on day one, without writing a line of code.
The security architecture behind this is called the PISP model (Payment Initiation Service Provider). When a client onboards to the app, a cryptographic key pair is generated on their device. A consent token issued by the community bank, signed and stored by the switch, governs exactly what the app can do on the client's behalf: which accounts are accessible, whether transfers can be initiated, and under what conditions. The bank retains full control. The client has full transparency. The switch is the trusted intermediary.
The current app supports balance checks, P2P transfers by phone number, QR-code payments, request-to-pay flows, and real-time push notifications with audio alerts, useful in market settings where someone is handling goods rather than watching a screen. It is not yet as polished as the mobile apps of Mexico's major commercial banks. But it works, it is secure, and it gives institutions and their clients a foundation to build on. We will continue developing it until it is.

AML: real-time compliance as a shared service

Anti-money laundering compliance is one of the heaviest operational burdens for small financial institutions. Mexico's financial regulator (CNBV) requires AML validation in real time for every transaction. Most community banks and savings cooperatives lack the technical infrastructure to do this, and even if they had it, building and maintaining a real-time AML engine is a significant and ongoing investment.
PCH's AML engine solves this as a shared service. When a transfer enters the network, particularly a cross-border remittance arriving via the CNP, the AML module intercepts it before it reaches the recipient's institution. It queries the client's profile in an AML database, checks against official blocked-persons lists, evaluates the transfer against the client's historical transaction pattern, and assigns a risk score. The whole process runs in under a second. If the transfer passes, it proceeds. If it's flagged, it's held for review.
The key innovation here is that the CNP can perform all these validations itself, using the party data it has already gathered during the lookup phase of the transfer. The community bank does not have to do anything. This is especially significant for remittances, which are the highest-risk transfer type from a regulatory perspective and the ones that community banks were least equipped to handle compliantly on their own.

Settlement, fees, and reporting

Settlement, fees, and compliance reporting tend to be underestimated in fintech projects and overdue in production. They are also the ones that regulators care about most.
In the Mojaloop vNext open-source base, settlement logic exists but is not calibrated for Mexico's regulatory framework, fee management is non-existent, and reporting is not designed for the specific formats and periodicities required by the Central Bank. PCH built all three from scratch, aligned with the specific requirements of the authorization process. Settlement reports are generated automatically. Fee calculations are configurable per participant and per transaction type. Compliance reports can be produced with a single click, in the formats required by Mexican financial regulators. These are not glamorous features, but without them the platform cannot legally operate. They are done.

Documentation and regulatory submission

The process of building a clearinghouse in Mexico requires submitting to the Central Bank a complete package of technical documentation, operational manuals, compliance procedures, risk frameworks, and internal norms, all of which must reflect the final, production-ready state of the system. For most of the grant period, the documentation process ran in parallel with the development process, which meant that every time the architecture evolved, the documents had to evolve too.
That cycle is now complete. The switch software meets all regulatory requirements. Every component of the operational documentation has been updated to reflect the current architecture. The formal submission package is ready. We expect to submit it imminently and to receive authorization in the summer of 2026.

Key social and collaborative activities

The technical work was never the whole story. Over the course of the grant, PCH was part of an extraordinary set of collaborative moments, some that shaped the technical direction of the project, others that expanded its human and institutional reach. Here are the main ones.

Oaxaca Work Week, August 2024

In the second week of August 2024, a team of five from the Interledger Foundation joined 20 PCH developers and collaborators for a full work week at a coworking space in Oaxaca City. It was the first time the two teams had worked in the same room. The week began with PCH's first major live demo: a complete end-to-end remittance from a US test wallet, through the CNP and the PCH switch, arriving at an account in a Mexican community bank. The ILF team was impressed.
The rest of the week was spent in deep technical sessions on the CNP's outstanding requirements, the settlement model, the SPEI integration architecture (with Conecta and Sinefi representatives present), and production deployment planning. On the third day, the entire group celebrated with a traditional Oaxacan calenda (a brass-band street parade with giant papier-mâché puppets) that wound through the streets of Oaxaca City, picking up curious locals along the way. On the fourth day, the group visited three community banks in the Oaxaca region: the offices of Red Oaxaca (a network of microbanks serving families across the greater Oaxaca area), a visit to Acreimex (a savings cooperative with 62 branches and 425,000 account holders), and a trip to Ejutla, a rural town an hour and a half away, where the team saw what day-to-day banking looks like for people in a small community (including what happens when the internet goes down). They also visited a mezcalero (an artisanal mezcal producer), whose business expansion was being financed by a Red Oaxaca microloan. The week closed with a clear shared roadmap toward the Cape Town Summit.

Rafiki Work Week, Cluj-Napoca, Romania, August 2024

Four PCH developers attended the Rafiki Work Week organized by the ILF at BreakPoint IT's offices in Cluj-Napoca, Romania, a gathering that brought together 20+ engineers from Rafiki, GateHub, JoPACC, and PCH. The PCH team worked directly with ILF's engineering and technical writing teams on outstanding Rafiki integration requirements, including how to handle KYC data flows, how to manage transfer status updates, and how to improve the deployment documentation for Rafiki integrators. Several of PCH's real-world deployment challenges directly informed improvements to Rafiki's official documentation. PCH developers also had pull requests merged into the Rafiki repository during the week.

Interledger Summit 2024, Cape Town, South Africa

At the annual Interledger Summit in Cape Town in October 2024, PCH presented on the main stage for the first time to a global audience. The presentation covered the social and economic rationale for the project: the Dutch disease paradox of remittances, the untapped potential of community banks, and the role of ILP in connecting them, and closed with a live demo. A transfer was initiated from the ILF test wallet using a phone-number-based wallet address, routed through the CNP and the PCH switch, and confirmed as received at a community bank account. The CNP dashboard showed the transaction in real time. A compliance report was generated with one click. A WhatsApp notification arrived at the recipient's phone. The audience, including Interledger community members from around the world, saw for the first time that this model was not theoretical: it was running code.

Payments Canada Summit panel, Toronto, February 2025

PCH participated in an Interledger Foundation panel at the Payments Canada Summit in Toronto, bringing the project's perspective to one of the most important payments industry forums in Canada. The panel addressed cross-border payments innovation, the US-Mexico remittance corridor, and the potential of innovative fintech to serve populations that commercial payment systems have not reached. It was an opportunity to speak directly to the North American financial sector about what PCH is building and why.

Rafiki Work Week, Cluj, Romania, July 2025

PCH was again represented at the Rafiki Work Week in July 2025, now held in the broader Transylvania region and gathering 38 participants from 8+ organizations. The week focused on Rafiki's next architectural evolution: a full event-driven redesign for horizontal scalability, new Open Payments documentation in multiple languages (including Spanish), a Kubernetes Operator for simplified deployment, card and POS integrations, and a Payment Pointer to SEPA flow. PCH's team participated across workstreams, contributing to the ongoing alignment between Rafiki's roadmap and PCH's production requirements.

Oaxaca Work Week, 2025

A second Oaxaca Work Week was organized in 2025 at La Clínica, a space in the heart of Oaxaca City that became PCH's workshop home for the week. The gathering brought together PCH's full development team alongside ILF engineers and partners for an intensive five-day sprint. The week featured demos of the consumer mobile app, the admin portal, the DevOps pipelines, the Kubernetes operator, and the CBS integrations; technical workstreams on PISP/3PPI, the Rafiki integration, settlement, performance, and scalability; and in-depth planning for the production environment and the November Summit demo. It was the most complete convening of the PCH and ILF teams to date and the last major collaborative technical sprint before the platform went into final production hardening.

Mexico Student Hackathons, September 2025

In September 2025, the Interledger Foundation organized four university hackathons across Mexico (in Oaxaca, the State of Mexico, Aguascalientes, and Mexico City) with PCH's active participation, both in organizing and tutoring during the hackathons. Over 500 students from 40+ higher education institutions explored solutions using the Open Payments API, from remittance tools to agricultural payment platforms to accessible transport systems. The Oaxaca hackathon was held at UABJO (the Benito Juárez Autonomous University of Oaxaca). Students from the Technological University of the Mixteca (PCH devs’ main alma mater) participated alongside students from eight other institutions.

Mumbai Fintech Fest, October 2025

People’s Clearinghouse participated in the largest fintech festival in the world alongside representatives of CECOBAN (an important clearinghouse in Mexico) and Interledger Foundation, to present its platform in a cross-border panel in front of an audience of 200 people. The visit included a private full day of analysis and discussions at the headquarters of the National Payments Corporation Of India (NPCI) in order to understand how India’s national RTGS and the country's financial inclusion strategy work. It also included invaluable discussions at the HQ of the amazing Savatra Technologies team, responsible for 80% of UPI integrations in India, and a key model for what PCH aspires to become.

Pahuatlán Workshop, October 2025

In preparation for the Interledger Summit 2025 in Mexico City, the ILF's Summit Program Committee organized an immersion workshop in Pahuatlán, a mountainous community in Puebla known for its centuries-old Amate paper craft. The workshop brought together technologists, grant makers, community builders, and open-source advocates alongside AMUCSS community bankers and local artisans. The group learned about the financial realities of rural communities: the cooperative savings systems, the harvest-season loans, the three-hour round trips to check a bank balance, the predatory lenders who fill the gaps at rates exceeding 500%. We discussed how open payment infrastructure can be designed around these realities rather than in spite of them. The experience directly shaped both the agenda of the Mexico City Summit and PCH's own thinking about what the mobile application needed to provide.

Interledger Summit 2025, Mexico City

The Interledger Foundation chose Mexico City for its 2025 Summit. PCH presented on the main stage to an audience that had already seen the documentary film about PCH before the session began (more on that below). The presentation covered the evolution of the platform from clearinghouse to full digital ecosystem, with a particular focus on why that evolution was necessary, not as a technical decision, but as a social one. Live demos showed the complete transfer flow: Rafiki remittance arriving with a push notification, P2P transfer by QR code, merchant payment with audio notification, and the PCH admin dashboard confirming every transaction in real time. Isabel Cruz, AMUCSS' Executive Director, closed the session by presenting the producers and speaking about 40 years of community finance work: the human story behind every line of code.

Communications and Marketing

International press coverage

PCH's story has reached audiences well beyond the Interledger community. A coordinated press effort, developed in partnership with the ILF communications team, resulted in coverage in some of the most respected outlets in global finance and fintech.
The Banker covered the US-Mexico corridor angle in depth. PaymentsJournal explored the cross-border payments dimension. Finextra focused on the community banking angle. The Paypers covered the ILF partnership announcement. Fintech Finance News and Citybiz reported on the project's launch. The Global Treasurer covered the remittances angle, and Financial IT also published pieces on the project.
PCH has deliberately kept a relatively low public profile in Mexico itself while the Central Bank authorization process is ongoing: a deliberate choice to ensure the regulatory conversation remains fluid and direct, without external noise. Once authorized, that changes.

"The People's Code", a documentary film

In September 2025, a documentary film about PCH premiered at Cine Tonalá in Mexico City: The People's Code, produced independently by a Mexican production company with Interledger support.
The film matters for reasons that go beyond press coverage. A project like PCH lives at the intersection of social history, economic theory, indigenous communities, open-source software, and financial regulation: a combination that is almost impossible to communicate in a press release or a conference slide. The documentary does something different: it shows what this work actually looks like from the inside. It shows Isabel Cruz and AMUCSS' community bankers in the field, their relationships with communities that have been organizing their own finances for decades without external validation. It shows the developers in Oaxaca: young people from indigenous regions building fintech infrastructure that most of the global financial world has never heard of. It shows the farmers and artisans who are the reason any of this matters. And it shows the friction, the uncertainty, and the slow accumulation of trust that a project of this kind actually requires.
We believe that a social-technological project that cannot explain itself in human terms is a project with a communication problem and possibly a mission problem. The People's Code is our evidence that PCH has neither. It is a record of the "behind the cameras" of building technology for a purpose, and of the communities that gave us the reason to build it.

"The Missing Link": academic paper on remittances and development

In September 2025, PCH co-authored a major academic and policy paper alongside Raúl Hinojosa-Ojeda (UCLA), Isabel Cruz Hernández (AMUCSS), and Yvonne Su (Oxford): The Missing Link: Remittances & Socially Trusted Financial Intermediation as Key Elements for Addressing Root Causes of Migration.
The paper makes a rigorous empirical case for something PCH has always argued intuitively: that cash remittances, in the absence of proper financial intermediation, do not foster regional development: they often undermine it. Drawing on data from Mexico, Guatemala, El Salvador, and Honduras, the authors document what they call the "vicious cycle of remittances": cash inflows into communities without productive infrastructure cause localized inflation, reduce competitiveness, and paradoxically deepen economic dependence on migration. Remittances growing at 165% in Mexico over the past decade (now exceeding $60 billion annually, far outpacing foreign direct investment) while rural communities remain structurally underdeveloped is not a paradox. It is a predictable consequence of the wrong delivery model.
The paper then describes the "virtuous cycle": what happens when remittances arrive into community-owned financial institutions that can convert them into savings, credit, and local investment. Employment grows. Productive projects are funded. Economic dependence on migration decreases. The authors document that this model already exists, partially, in the network of savings cooperatives and community banks that AMUCSS and its peers have been building for four decades. What has been missing is the fintech infrastructure to make it work at scale, which is exactly what PCH is building.
The paper closes with six concrete policy recommendations across regulatory, technological, and social dimensions, and includes a textbox specifically describing PCH and the Interledger Protocol as a working implementation of the virtuous cycle framework.
The paper was distributed as a designed, printed booklet at fintech events in Mexico and India, reaching several hundreds of practitioners, policymakers, and researchers. It was also published digitally and shared through ILF channels. It is, we believe, the most complete intellectual articulation of why PCH exists, and one that places it within a broader conversation about migration policy, development finance, and the responsibilities of technological innovation.

Broader outreach: Toronto, India, and beyond

Communications and marketing, for a project like PCH, are never just about getting our name in the press. They are also about listening to other regions, other systems, other approaches to problems that look like ours from a distance and turn out, up close, to be both different and illuminating.
The panel at the Payments Canada Summit in Toronto was a case in point: speaking to practitioners from one of the world's most regulated and sophisticated payment ecosystems about why fintech infrastructure for isolated areas matters for countries generated conversations we wouldn't have had otherwise about regulatory philosophy, about what "inclusion" means to people who design systems from the top down rather than from the community up, and about the potential of the US-Mexico corridor for the North American financial sector. Also, remittances are not a Mexican problem: the vicious cycle of cash remittances is a global pattern. And the policy recommendations that emerge from studying Mexico apply, with adaptation, to corridors across South and Southeast Asia, Sub-Saharan Africa, and Central America. Sharing PCH's work in those contexts has helped us understand which parts of our model are genuinely transferable and which are specific to Mexico's regulatory and social landscape.

What’s Next?

Authorization and launch

The most important milestone ahead is the one we've been working toward since January 2024: Central Bank authorization. The documentation package is complete, the software meets all regulatory requirements, and we expect to submit the final version to the Central Bank imminently. Our expectation is that PCH will be authorized and ready for commercial launch by the summer of 2026.

Cross-border operations: finding the right partners

With the CNP production-ready and the Rafiki scheme complete, the cross-border layer of PCH is technically operational. What comes next is building the commercial and institutional relationships that will make it real. Starting this summer, we will be actively seeking new partners on the US side: financial institutions, money transmitters, and Rafiki-compatible wallets that want to participate in a genuinely different remittance model. We have been in contact with MiPlata, a fellow ILF grantee with a growing presence in the US-Mexico corridor, and see great potential in this collaboration, not as a commercial arrangement alone, but as a shared contribution to the communities both projects are committed to serving.

Commercial rollout: a fieldwork process

Launching a digital payments platform is not the same as delivering it. The community banks and savings cooperatives that will join the PCH network are institutions with deep roots in the communities they serve, and many of those communities have had little or no exposure to digital financial tools. We cannot release an application, send a press announcement, and assume adoption will follow.
What we are beginning instead is a much more deliberate process: conversations with the representatives of partner institutions, but also with community leaders, with the people who use those banks and cooperatives every day, and with the local organizations that have been building trust in those communities for decades. We are designing training strategies and community support models that account for the reality that someone receiving their first digital remittance may never have interacted with a financial app before. We are planning field visits, pilot programs, and feedback loops that will shape how the platform is introduced and how it evolves after introduction.

Offline payments

A meaningful portion of the communities PCH aims to serve have unreliable or no internet access. We believe that digital financial inclusion in those communities requires a payments model that does not depend on a continuous connection, one in which transactions can be initiated and confirmed locally, then cleared to the network when connectivity is restored. We are committed to developing this capability, because without it, the platform's reach has a ceiling that we are not willing to accept.

Community Support

We have been fortunate to build PCH surrounded by a community that has been generous with its time, expertise, and belief in what we are doing. We would like that community to continue growing, and there are specific areas where new collaborations could make a real difference.
The most immediate need is on the cross-border side. If you are working in remittances, as a money transmitter, a Rafiki implementor, a wallet provider, or a fintech operating in the US-Mexico corridor or similar corridors, we want to talk. PCH's CNP is ready to connect to the right partners. MiPlata has been a promising point of contact, and we are eager to expand that circle. Every new Rafiki-compatible entity that connects to our network extends the reach of the platform directly into the communities waiting for it.
Beyond remittances, we are always interested in connecting with organizations working on financial inclusion in rural and indigenous contexts, whether in Latin America or elsewhere. The problems PCH is solving are not unique to Mexico, and the solutions we are building are designed to be adaptable. If you see a parallel between your context and ours, we would genuinely like to hear from you.
Finally: if you know policymakers, regulators, or researchers working on migration, development finance, or remittances policy who should know about The Missing Link paper and the model it describes, please share it. The academic and policy case for what PCH is doing needs to reach people who can act on it, not just people who already agree with it.

Additional Comments

We want to close this report with gratitude. The Interledger Foundation has been far more than a funder to PCH. The ILF team — its grant program team, its engineers, its communications colleagues — has been present at every stage of this journey: in Oaxaca, in Cape Town, in Cluj, in Pahuatlán, in Mexico City, and in countless calls across time zones in between. The patience, the technical depth, and the genuine care for the mission that characterize the ILF staff have made an enormous difference to what PCH became. We thank them sincerely.
We also want to acknowledge the extraordinary network of people and organizations who contributed to this work in ways that don't appear in grant reports but are indispensable to how projects like this actually get built. The Mojaloop Foundation and its community, particularly those who gave generously of their time to support our work on the switch. ThitsaWorks, whose Mojaloop expertise was essential in the early phases. Fintecheando, whose knowledge of the Mexican fintech ecosystem and commitment to open-source collaboration was invaluable. Conecta, for their patience and expertise in walking us through SPEI. Sinefi's team, for embracing a new integration model in an environment where gRPC was entirely unfamiliar. The team at Breakpoint IT in Cluj, for twice hosting us with warmth and excellent coffee. And the many others (developers, advisors, community leaders, artisans, mezcaleros, and bank tellers) who shared their knowledge, their time, and their lives with us over these two years.
Most of all: to the development team in Oaxaca, who built this. You know who you are, and you know what you did. The communities this platform will serve are lucky to have had you building for them. We are not done. We are just getting to a new stage.

People's Clearinghouse — Progress Grant Report #1

Roberto Valdovinos — Wed, 02 Oct 2024 16:04:15 +0000

Project Description & Objectives

The team behind People's Clearinghouse (PCH), a Mexico based project, has worked for decades with communities in very diverse rural areas, and we have long asked ourselves what the right path is for fostering sustainable regional development, in a way that doesn’t build any sort of dependency, but rather strengthens communities and promotes their self-sufficiency.

AMUCSS, for instance, the main stakeholder of PCH, has decided that the right path is to help build people-owned community banks in those regions. But the growth of a community bank in a non dynamic economic region can be complex and slow. Others have seen remittances, a massive injection of capital into these regions, as the way to promote regional development. However, remittances often bring well-being to specific recipients only and have very narrow uses, which do not foster regional development.

PCH, first as an idea, was our bet for the possibility of bringing together these two concepts: community banks and remittances, in such a way that we could foster sustainable development in a systematic way in many communities. Indeed, when remittances reach a community bank with a well-planned development strategy, that financial institution will have the capacity to invest and offer loans that support that development strategy.

Sadly enough, there are no direct connections between community banks and international financial systems that would allow remittances to be transferred and deposited directly into community banks. Remittances solutions that exist nowadays involve first and foremost cash delivery, which is more expensive, has higher risks, and doesn’t involve any form of financial intermediation by local community banks.

So PCH, with AMUCSS’ lead and support, had to find a way to solve that technical problem: how to connect community banks to financial systems, so that these communities banks could access account-deposited remittances transferred from abroad?

Today, PCH includes Rafiki and a Mojaloop switch as part of its solution, for interconnecting small financial entities: a) among themselves, b) with the national financial network, c) with international networks, thanks to an authorized money transmitter, managed by PCH, that we have defined as a “cross-network-provider” (CNP) in PCH's context, because it functions as a participant in the PCH network and as a bridge to other networks through Rafiki.

Together, the switch and the CNP constitute PCH's digital payments ecosystem. Because it uses open source fintech solutions and speaks directly to the people and community banks it pretends to serve, PCH can be considered a grassroots, social tech organization.

Here's a 3 minutes video introducing PCH (from January 2024):

Project Update

To get where we had to, we needed to give shape to an effective team of developers that would be capable of transforming the PCH idea into a concrete platform. For that, they had to understand very well the open source technologies being used (Rafiki, Mojaloop) and be comfortable enough to integrate them through a new, intermediary entity that had to be created (what we have called the CNP), both in an efficient way and following the Mexican regulatory framework for transfers and remittances.

We could have hired a group of specialists to do it, or a local fintech company. Instead, we chose to replicate our social perspective also in the way we would build our team: we closed an agreement with the Technological University of the Mixteca region, based in a small indigenous town in the middle of Oaxaca, which has a very good record of students joining high level projects in Mexico. With their guidance, we did a long selection process to determine the ideal candidates, who had to be very good developers familiar with TypeScript, with enough proficiency in English and with a frank interest in social justice.

Once selected, we initiated a one-month training process, where the candidates became familiarized with the Interledger Protocol, Open Payments, Rafiki, and Mojaloop through a series of training sessions and materials. The team, formed today by 8 great developers from Oaxaca, has given excellent results, creating an atmosphere of fraternal collaboration and constant learning.

In that sense, the first very important milestone that was achieved in this phase, was to build a functional, successful team that is committed to the project and willing to change the lives of many communities through the use of open source innovative solutions. That team today has become very confident in deploying Rafiki and Mojaloop environments, in working with their APIs and their transfer flows, in testing them, and more recently even in proposing new features to these technologies, so they may better serve their purpose.

The support and patient advice we received from the great ThitsaWorks team in Myanmar, as well as from the awesome ILF tech team, and from the wonderful team at Break Point, and from other incredible developers like Tadej Golobic and Pedro Barreto, were absolutely essential for this milestone to become the success it finally was.

A second milestone that is worth mentioning here, is the actual development of a cross-network-provider or CNP (the term was coined by Michael Richards from the Mojaloop Foundation for referring to entities, whether only technological or also legal, whose function is to intermediate between two payment schemes). The goal was to allow Rafiki transfers initiated in the United States to reach the CNP, then be converted into a Mojaloop format so the switch is able to route them towards the appropriate community bank. In that way, we create a single entry point for Rafiki, that powerfully translates transfers into other payment schemes.

Faster said than done. Rafiki and Mojaloop have very different ways of treating transfers and information contained in each transfer. In developing the CNP, we had to make sure that we were being consistent with the way each of the transfer systems works, and that we wouldn’t have Rafiki transfers that didn’t complete, but were still completed on the Mojaloop side –or vice versa–, which was a puzzle to be daily thought and rethought.

Then, when we had the CNP doing its function, we still had to adapt it to the Mexican regulation and to the use cases that a normal money transmitter would desire for their staff. We luckily had the experience of the already authorized money transmitter from AMUCSS, so we could advance quickly based on their experience.

On the Rafiki side of things, the peering with other entities wasn’t necessarily an easy task (thanks so much to the team behind Rafiki.money for all their help!), and concerning Mojaloop we had much trouble integrating core banking systems (CBS) to the switch, made easy by ThitsaWorks' help implementing their LCC connector as an intermediary between the switch and its participants.

Finally, the day came in which we had to present an initial result of the process. That happened at the beginning of the Oaxaca Workshop PCH organized in August, with the kind participation of Max Kurapov, Jason Bruwer, Julaire Hall, Alex Lakatos, Michael Richards, Pedro Barreto, and friends from Fintecheando, Conecta and Sinefi, 3 important fintech companies in Mexico. You can read more about the workshop in this beautiful report coordinated by Max.

The demo of the CNP was successful in that it demonstrated that the integration between both transfer flows (Rafiki and Mojaloop) is possible, and that it can be done in an efficient, transparent way that is consistent with the regulation. The demo showcased actual end-to-end transfers that went across Rafiki and Mojaloop, ending in the community bank account of the expected recipient.

The workshop represented the accomplishment of an important milestone, but one which we will keep on working on to bring our solution to production in the near future. We have continued to refine our prototype at the amazingly useful Cluj Work Week (report coordinated by Ioana), where 4 developers from PCH contributed to the Rafiki APIs and the Rafiki deployment documentation, and worked on CNP-related issues with the ILF team. In the near future, the Cape Town Interledger Summit will offer PCH and key allies the opportunity to present the current state of the CNP and the entire ecosystem around it.

While several other milestones could have been presented in a similar fashion, we have chosen these two because they represent very palpable achievements. If we had to summarize in two key concepts the process of giving shape to a successful open source dev team in Oaxaca and of them building a successful prototype for the CNP, those two words would be: collaboration and perseverance. Thanks to all who have contributed in one way or another to PCH’s ideals becoming more and more concrete each day.

Key Activities & Outputs

Several key activities of PCH for this phase have focused on the Rafiki-CNP process, following the pre-established timeline:

We created several Rafiki environments, for dev and testing;
We defined a global Rafiki-CNP-PCH architecture;
We specified a CNP transfer flow that is now working correctly;
We developed a CNP admin platform that allows operators to update CNP information, produce compliance reports and (soon will) manage liquidity, on the basis of the current regulation and processes for our active money transmitter;
We built and showcased a working prototype for the CNP;
More recently, we've introduced idempotency in the CNP treatment of transfers, along with several improvements that were necessary;
Of the outstanding features, we're currently working on the error handling flows for faulty transfers at the CNP. While our prototype is almost ready, we hope to be producing a real-money-handling pilot early next year.

Other key activities have involved the deployment and configuration of a Mojaloop system:

We have finished parametrizing the oracle/ALS for adequate routing using MSISDN as aliases;
We have deployed dev and staging Mojaloop environments in AWS, with help from ThitsaWorks, and more recently we've deployed an all new dev cluster in GCP (traditionally Mojaloop deployments only run in AWS), so as to standardize environments used in our different processes;
We had already integrated AMUCSS' core banking system (CBS), called Isis, to the switch, with ThitsaWorks support, using their LCC connector for that purpose. Now we have integrated three CBS in a new fashion that allow us to connect them directly to the switch: Isis (done), Mifos (almost done), Sinefi (in process). That was only possible thanks to connections (clients) produced by Pedro Barreto in TypeScript and C# ;
We have been able to test P2P transfers and we are now working on error handling mechanisms for switch-participant connections;
We are also in the process of building a prod environment in GCP for our hub that would be powerful enough to run all needed services, without being more expensive than it should;
Other important features are confirmed or in the process of being completed in our version of Mojaloop: a synchronous API production-level solution that avoids the need for connectors, duplicate checks/idempotency, third-party IAM integration, liquidity management supporting MongoDB & TigerBeetle, certificate exchange between participants, and 3PPI. All this, under the lead of Pedro Barreto.

Additional key activities concern the authorization process with the Central Bank. In an effort to render the switch more efficient and accessible, we have adapted the architecture and transfer flow on the Mojaloop side to the most advanced architecture. This has leads us to the necessary task of updating documents and manuals presented to the Central Bank, which should take two to three months. Once the new, essential switch features are ready and well documented, we will be close to finalizing the authorization process for PCH. While this process has taken longer than expected, we're in a good path to a successful implementation, and for that we have to thank the Central Bank's insights into the project, including the need to have the most efficient switch possible on the Mojaloop side so that transaction costs transferred to community banks and their members are as tiny as possible.

While on the more technical aspects our platform is gradually approaching production-level status, on business and operations' grounds there are still some important decisions to be taken on the cross-border side: there's an analysis phase that will become a priority in the coming months and also involves some outreach activities with the Atlanta Fed and several Money Transmitters based in the United States. Key questions concern US compliance for Rafiki implementors and the definitive settlement model that the CNP will implement with US-based account-servicing financial institutions and/or money transmitters.

While these points are out of PCH's national scope, they are key to a successful binational ecosystem. A very interesting panel at the ILF Summit will precisely address part of these points, and we're looking forward to its results.

Project Impact & Target Audience(s)

PCH is meant to benefit first of all the 200k users of AMUCSS’ network of community banks, distributed in hundreds of communities along rural Mexico. ⅔ of these users are women and at least half of them are speakers of one or more indigenous languages. The symbolic importance of giving priority to this population lies in the possibility of prioritizing the impact the project can have in those communities that are always left out by technology and innovation. We want to start the other way around.

For PCH to be viable in the long term, we also had to build alliances with several social financial institutions beyond AMUCSS’ network, and first of all, with the most innovative saving coops of the country. By now we have onboard 4 or the 5 largest saving coops of the country, one of whose CBS is finalizing integration with the switch.

PCH is meant to become the payment network of the social financial sector, currently corresponding to a universe of 17 million users of saving coops, community banks and “social banks” (by their legal names: SOCAPS, SOFINCOS, SOFIPOS), which tend to cover rural and semi-rural regions, as well as small urban areas where commercial banks are less frequently found.

Indirectly, too, PCH will be serving millions of migrants working in the United States who regularly send money to their families back home and will benefit from our innovative remittances’ solution, as they will be able to make cross-border transfers from their US account to the regional community bank or saving coop, by means of the CNP and using Rafiki.

A project as PCH, dedicated to the underserved, the migrants, the indigenous groups, and women foremost, is certainly in agreement with the Interledger Foundation’s mission, because innovative, open source technologies should always be meant for everybody’s enjoyment, with no exceptions. (The following image shows the everyday's users of an AMUCSS' community bank)

Monitoring & Project Evaluation

The construction of PCH’s ecosystem is advancing well, and is expected to complete all its milestones by the end of the grant period, including a viable prototype for the CNP, very close to production status, and an authorized clearinghouse ready to change the lives of many communities.

But several risks need to be considered, among them:

1) The technology available at community banks is not optimal for real-time transfer systems. We have solved this problem by creating our own APIs that interact with the core banking system of entities and with the switch. However, an important mid-term objective for the success of PCH’s proposal is to lead the upgrading of current technological solutions that community banks implement internally, so that in the longer term PCH can push forward an innovation process that includes them fully, rather than dragging them behind.

2) While the authorization process with the Central Bank officially began a year ago, there has been constant upgrades in the Rafiki, Mojaloop and now the CNP side. The documentation of these changes and upgrades has to be very well planned and explained in norms, guidebooks and manuals, so that we do not delay the authorization process that is needed for a successful implementation in the expected regions.

3) Essential aspects of the cross-border transfer fall on the side of account servicing entities and regulators in the US, out of PCH’s proper landscape. While we will be discussing and advancing an all-encompassing solution, that considers settlement and compliance, a big chunk of these points is managed in the US, so we cannot control its progress and correct implementation. A key task will therefore be to work with the ideal allies in the US, those who can manage its complexity and make the most of this binational project's potential.

4) Transitioning from tech innovation only to a tech innovation-operation model will not be easy. That will imply growing the team and strengthening particular areas that aren’t tackled on a daily basis in the development phase (liquidity, compliance validation, risk management). Human resources management will become very important once PCH is authorized to operate.

PCH is ready to tackle these and other challenges that will have to be faced, and ILF’s active support of PCH's mission gives our team the confidence and determination needed to never stop in the process.

Communications and Marketing

PCH's platform has been discussed in different forums this year, including an interview with El Economista newspaper from January, a Payments Canada conference from July, the Oaxaca workshop in August, and the Annual saving coop association congress in September. However, until the authorization process with the Central Bank is dully completed, PCH has decided to keep a relatively low profile in the national context, in the goal of facilitating a continuously fluid discussion with the Central Bank.

Most international press exposure has been the result of a collaborative process with ILF's great PR team, and has led to very insightful publications from media such as The Banker, PaymentsJournal, The Papers, and Citybiz (a list of publications with links is attached at the end of the report).

Once authorized, just as planned in our timeline, we'll follow up with a specific outreach strategy that will focus on three different levels:
1) strategies for binational communities, including physical visits and digital outreach, to grow visibility at the grassroots level;
2) adding new saving coops and community banks as allies, to grow adoption among potential participants;
3) working with regulators and MTOs in the US, to define the binational strategy with our US counterparts.

Additionally, training workshops will be carried out with community banks, so they can better understand the complexities of PCH, and serve as regional replicators of PCH's outreach effort.

What’s Next?

Aside from the outstanding elements already mentioned (prod environments, error handling flows, settlement model specifications, final changes to CNP and Mojaloop, updated operational guidebooks), PCH will start working on new, key elements such as:

SPEI (Mexico's RTGS system): The connection between PCH and SPEI requires a previous analysis, including AML procedures compatibility with PCH, data center procurement, and the building of an interoperability POC between PCH and SPEI. Once all this is ready, we will have to test our PCH-SPEI solution in the Central Bank's sandbox for that purpose.
Outreach: training workshops with community banks, launch strategies (in Mexico and binationaly), and scouting for additional funds to support launch strategies.
Rafiki-CNP: We will have to finish several outstanding features and prepare our Rafiki-CNP instance to run in an ad hoc production environment that will support all features developed by PCH for making the CNP a very robust system.

Community Support

The Interledger community has been amazingly supportive all along the grant period. We have been able to collaborate with amazing developers, devOps and software architects that have helped us bring our work to the next level. Without such a community, nothing could have been achieved!

The next phase is a complex one, because we will be facing a non technical challenge: working with US regulators, money transmitters, real accounts. While our project is based in Mexico, soon we'll need to put in motion the binational dynamics that will allow PCH to successfully introduce itself into the largest remittances' corridor in the world, the US-Mexico corridor. Any advice, recommendations, connections or comments of any sort that would allow us to better surf this cross-border, binational environment, will be more than welcome.

Additional Comments

We would like to thank the Interledger Foundation for believing in PCH's mission, and thank all those who have helped us bring PCH's platform to life, first and foremost the ILF dev team and management team who have been patient and tolerant with PCH's staff, as well as all the Break Point team, and Tadej, and ThitsaWorks, and our local partner in Mexico, Fintecheando, and Michael Richards from the Mojaloop Foundation, and Pedro Barreto and Rui Rocha, and all others who have been part of the process at one stage or the other, for all your advice and insights for PCH's team.

Relevant Links/Resources

Here is a list of recent publications about ILF and PCH, prepared under the lead of ILF's wonderful PR team:

The Global Treasurer, US-Mexico Remittances Initiative Empowers Mexican Rural Banks
Connecting the Dots in Fintech, Newsletter
MUJER ES MÁS, U.S.-MEXICO REMITTANCE INITIATIVE EMPOWERS MEXICAN RURAL BANKS
The Banker, New US-Mexico payments system to connect rural communities / REPRINTS: Germanic Nachrichten, Neues US-mexikanisches Zahlungssystem soll ländliche Gemeinden verbinden ; Credit and Collections News, New US-Mexico payments system to connect rural communities
PaymentsJournal, Cross-Border Payments Are Heading for Rural Mexico
Finextra, New US-Mexico payments pathway will tap rural community banks / REPRINT: NewsJani, The new payment route between the US and Mexico will open up rural community banks
The Paypers, People's Clearinghouse partners with Interledger Foundation / REPRINT: BayPay Forum, People's Clearinghouse partners with Interledger Foundation
Fintech Finance News, People’s Clearinghouse and Interledger Foundation Launch Digital Infrastructure Project
Citybiz, People’s Clearinghouse and Interledger Foundation Break Ground on New Payments Pathways Between the USA and Mexico
The Green Sheet, New payments pathway between USA, Mexico underway
Financial IT, New USA-Mexico Payment Pathway Launched by People’s Clearinghouse & Interledger Foundation
Crypto Reporter, People’s Clearinghouse & Interledger Foundation Launch Digital Infrastructure Project

The People's Clearinghouse — ILF Grant Final Report

Roberto Valdovinos — Thu, 01 Jun 2023 23:29:57 +0000

Group photo of the Public Forum “Digital means of payment for financial inclusion” organized in April 2023 by the People’s Clearinghouse with support from the Interledger Foundation.

Brief Project Description

The People’s Clearinghouse is a technological platform for the social sector in Mexico, based on a large network of community banks and savings coops. By implementing the Interledger Protocol associated with other technologies, the People’s Clearinghouse allows clients of these social financial institutions to initiate digital transfers and also to receive remittances in their accounts from family members abroad at the lowest possible cost. This will boost local and transregional economies and empower the rural, marginalized and indigenous communities where community banks are located.

Project Update

In our previous progress report we mentioned that a major win was the public validation of the project: how the Interledger Summit and the following meetings and events allowed us to realize how important this project could become, through the eyes of others. Since then, thanks to several events and foremost of all the Public Forum for Digital Financial Inclusion, that public visibility has shifted into the next level: it’s not the validation of an idea anymore, it’s the acceptance of a concrete, existing platform. The People’s Clearinghouse now exists, and is a platform that institutions and organizations can and perhaps should connect with. Take for instance the comments by the general director of Financiera para el Bienestar, the public institution in charge of disbursing remittances in its 1,700 locations:

Or the comments by the General Treasurer of Mexico:

Both comments (click on the images for video extracts in Spanish) were made at the Digital Financial Inclusion Forum organized April 25th, 2023 by the People’s Clearinghouse with the sponsorship of the Interledger Foundation. Also that day, main financial organizations of El Salvador and Guatemala suggested an alliance with the People’s Clearinghouse, and national SPEI providers (SPEI is Mexico’s RTGS payment system, managed by the Bank of Mexico) openly proposed a partnership with the platform. For us it was a turning point: the People’s Clearinghouse will be in production in the near future no matter what, since the need for this platform is now more than obvious to all stakeholders and in particular to the social financial sector and to the regulators. That is the project’s biggest win until now.

Equally important is the impact that this visibility has brought for potential alliances of the popular financial sector. In the days following the forum, tens of community banks and savings coops contacted us to discuss how the People’s Clearinghouse could serve their needs and what the process would be to join. We have met with the second, third and fourth largest savings coops of the country, which are all willing to be part of this effort and invest in a platform for the social sector and by the social sector. If we’re able to successfully confirm these partnerships in the coming weeks, that would mean we could launch the clearinghouse with more than one million interconnected users. Here’s a picture of our last meeting with Acreimex’s directors: it’s the third largest savings coops in the country, based in Oaxaca, with 65 branches which all receive remittances. They developed their own core banking system, which is used by 25 savings coops.

On the other hand, with respect to the authorization process for the clearinghouse, we’ve had to face new information security requirements as a result of the enlarged scope of the project. The “Clearinghouse for Transfers between Cellphones” regulatory documentation is minimal (5 pages long) which might seem like a good thing, but it isn’t: it simply means that the level of compliance is subject to the authorities discretion. So with the considerable growth in the scale and scope of the project, we’ve had to produce additional mechanisms and the corresponding documents to ensure maximal compliance with ISO 27001. Thus our last hired technology providers were directly related to information security aspects. We’re working on the corresponding documentation, so that we can provide an updated version to the Bank of Mexico in the coming weeks and not slow down the authorization process, which must be ready before the end of the year.

We’ve also had to struggle with the complexities of a Mojaloop deployment and those of a Rafiki-Mojaloop interoperability model, all of which is discussed in the Progress on Objectives section. We’re counting on the wonderful Rafiki team to get to a final Rafiki model that we can work on intensively in the coming months to implement a realistic and powerful remittances’ channel in the first semester of 2024.

Project Impact & Target Audience(s)

AMUCSS, the organization behind the People’s Clearinghouse, is itself led by an indigenous woman, and its network of community banks serves around 200,000 people, of which 60% are women, 54% are in marginalized/very marginalized regions and 63% belong to indigenous communities (in fact 34 indigenous languages are spoken in all of AMUCSS’ community banks taken together). By providing innovative and low cost technologies, the People’s Clearinghouse will have a direct impact on these communities.

To illustrate our purpose in this section, the following image portrays some of the leading indigenous women in charge of the very humble community bank SMB Mujeres de la Lluvia (“Women of the Rain” or “Kinal Anzetik” in the Tzeltal language), which is part of AMUCSS’ network and actively supports the People’s Clearinghouse.

If we also take into account the alliances that are being negotiated at this moment with most of the 10 largest savings coops of Mexico, then the expected impact goes well beyond 1 million account holders benefiting from the People’s Clearinghouse from day 1, mostly from rural, marginalized regions (what we call “deep Mexico”), all of which receive remittances. If we’re able to implement our remittances model on this whole network, it will be a game changer for the future of the impact of remittances in communities, since account remittances (accounts that are credited into community banks/savings coops accounts, instead of arriving in cash) can have a major impact in local development, as is explained in the following chart:

We believe this process is consistent with the Interledger Foundation’s mission: real financial inclusion from below, through innovative open-source technologies that reduce dependency on mainstream financial actors (which is required to keep costs as low as possible). At the same time, the philosophy guiding the People’s Clearinghouse process is that real empowerment can only come from within and cannot be imposed on any community or individual; our role is to provide tools that facilitate that empowerment and to promote communities’ self-awareness and self-engagement as agents of change, but it is those community that bring change. We believe this philosophy to be consistent with that of the Interledger Foundation.

Progress on Objectives, Key Activities

Our main objective was and still is to be able to provide, for the social sector, both a sound digital payment/transfer platform and a platform for routing fast and cheap remittances directly into accounts of community banks’ account holders. During the grant process, our research brought us to the conclusion that a “Clearinghouse for Payments between Cellphones” combining Mojaloop and ILP is a powerful solution for that goal, as long as we can use the public rails between the Fed and the Bank of Mexico (“FedGlobal”) for settling remittances, which we’ve confirmed is indeed possible (another private solution could also be used, but the advantages of the public rails are indisputable, even from a compliance point of view for issuing banks in the US).

Concerning the remittances’ side, we’ve progressed on several grounds (the first two of the list were part of the previous progress report):

Our survey to 23 community banks has allowed us to confirm the perceived importance account remittances have for these financial institutions: less cash management reduces risk and cost of transportation; more savings in accounts augment their lending capacity.
Our research at remittance stores in California has allowed us to refine the business model for our proposal, also comparing costs, delays, risks involved.
We’ve set up a working group with the wonderful Rafiki team, and Michael Richards and Vijay Kumar Guthi from Infitx, meant to define the interoperability process between Rafiki and Mojaloop, so we can use a “cross-network provider” that both implements Rafiki and participates in a Mojaloop scheme, and thus serves as a translator between both models. The working group is still in progress, concentrating on the three main issues of routing (Rafiki identifies individual accounts, Mojaloop identifies scheme participants), quoting (Rafiki quotes are at least in part defined by the accounts, Mojaloop quotes are defined entirely by the scheme) and transferring (funds reservation and management of rejected transfers, for example).
With that group and under Richards’ lead, we were able to prepare a PoC of that interoperability process meant for remittances, that was presented at the Mojaloop Community Meeting last March in Rwanda (see video of the presentation below), which was very well received and has been very helpful for us to understand the remittances’ messaging process.
We’ve defined a US-based BaaS provider as our key ally in this process, which has been actively supporting the People’s Clearinghouse and is willing to implement Rafiki to actually take our model into production.
Research on FedGlobal is important as it is our intended settlement solution (Rafiki and Mojaloop are meant to record and transfer remittances-related obligations: actual cross-border settlement is another issue). We’ve been discussing with several experts on FedGlobal’s flexibility for interacting with our model, including James McAndrews (ex Fed NY) and Elizabeth McQuerry from Glenbrook Partners (who worked in designing FedGlobal at its inception). We have the certainty that the model is viable and the next steps should directly involve the Atlanta Fed. Advantages for FedGlobal is that we could boost its market considerably; advantages for the People’s Clearinghouse is that we could offer the lowest fees and the best FX, for the benefit of migrants and their families.
Two important things that we would have liked to do and will take place this summer are: visiting the Atlanta Fed to discuss both technological and regulatory aspects that will eventually need to be determined before planning a production phase; and visiting several remittances-sending communities in the US which also have community banks connected to FedGlobal, to discuss implementation both with community leaders and the local community bank (as is the case of Durham, North Carolina, in which lives more than half the population of San Pablito, a small town of Central Mexico with its own AMUCSS’ sponsored community bank).

To know more about our platform and its use of Rafiki, please check this presentation from March, 2023:

Basic model of the Rafiki-Mojaloop PoC for remittances

SIE API=returns daily Bank of Mexico’s FX
CNP=Cross-network provider (a Mojaloop participant that implements Rafiki)
FSPIOP=Mojaloop’s APIs
PM4ML=Payment Manager=Adaptor from Mojaloop’s APIs to an institution’s Core’s APIs
Isis+=A Core banking system developed by AMUCSS

Concerning the Clearinghouse side, we’ve also made good progress (the first two of the list were part of the previous progress report):

We incorporated the social company that is being authorized as a clearinghouse. The organization AMUCSS is its main shareholder, which itself is owned by tens of community banks, which themselves are owned by communities. This sounds good, but is a burdensome process, as KYC and AML procedures had to be enforced for each individual member! We’ll also be bringing onboard major savings coops as shareholders of the company, so that the clearinghouse fully represents the social sector.
Determining the ideal legal structure for the project was a hard choice between an “Electronic Payment Funds Institute” (IFPE) and a Clearinghouse, which are governed by two different public institutions. In the end, we chose the Clearinghouse as it allows us to create an ecosystem where different IFPEs, community banks, and savings coops can co-exist as part of a “social switch” in which an ILP solution is not only our solution, but can become the solution of the whole social sector. So the authorization process is ongoing, with constant discussions with the Bank of Mexico.
Also concerning the authorization process, we’ll have to test and present a working Mojaloop-based clearinghouse platform in the coming months. While we’ve been able to effectively work on test ambiances with two powerful tools (Testing Toolkit and Miniloop), the actual deployment of a Mojaloop hub is proving to be quite harder than we expected. This is a key element that we’ll be working on in the coming weeks and months, and we’ll probably be requiring some external help from more experienced Mojaloop deployers.
By law, the clearinghouse must start its SPEI connection process right after being authorized. SPEI is Mexico’s real-time gross-settlement payment system. The goal of that regulation is to make sure that any clearinghouse is not completely autonomous from the national banking network. So we have worked for the last 4 months with two main SPEI providers to determine the interoperability between their SPEI systems and our clearinghouse platform, so that we can be ready before the authorization process is over and quickly carry on the SPEI certification process. We’ve decided to partner with such a provider, instead of using our own platform for SPEI, as SPEI is overregulated (more than 300 pages of rules and 800 pages of manuals) and that would considerably slow down our process. The only condition we’ve set is that the provider must understand our platform as a social project and join in as part of the project, not as an external provider. We’re in the middle of that negotiation with both providers and we’ll have good news on this front in the coming days.
Our business model is ready: by dividing intra-clearinghouse transfers and SPEI transfers, we can be sure we provide the lowest cost of the market to participants of the clearinghouse, while still being sustainable and capable of scaling to the whole social sector. Our initial financial model is based only on three income sources available at launch: P2P transfers (either by SPEI or intra-clearinghouse), remittances disbursement to accounts and social benefits disbursements. Additional services can and will be provided, but each will require an additional Central Bank authorization and a new use case development. Our model is concerned only with operation costs after launch (not pre-launch development) and reaches equilibrium after 22 months –but if an agreement is reached with main savings coops, as it's expected to happen this month, that number would be reduced to a few months.
We’ve been visiting community banks and saving coops along the country for the last 3 months, to invite them to become part of the platform as participants, investors and advisors: as mentioned above, we’re about to sign an agreement with several social financial institutions, whose volume of clients is above a million and whose technology (core banking systems, apps) are also used by other financial institutions. We hope we can announce good news very soon. In any case, we’ll devote the coming months to visiting new potential participants of the clearinghouse and also potential additional investors from abroad.
As adoption of digital means of payment is one of our main concerns at launch, we developed a basic demo that connects a WhatsappBot to a Mojaloop platform, so that payments can be initiated using whatsapp (and incoming remittances be notified by Whatsapp too). We would need to develop a more complex PoC in order to be able to eventually launch with that functionality included. You can view the video of the demo here (in Spanish… sorry about that; and more on the Forum in the next section):

Communications and Marketing

We’ve been promoting the People’s Clearinghouse in several forums and channels, including the following:

Presentation video for the People’s Clearinghouse (already shared in last progress report)
An article on the project published at El Economista(financial newspaper) (February 16th, 2023)
Presentation at Mojaloop Community Meeting PI-21 (March 9th, 2023)
Presentations at the Global Digital Development Forum(April 26th and 27th, 2023)
People’s Clearinghouse Youtube channel and other social media

We also organized the aforementioned Financial Inclusion Forum to promote the People’s Clearinghouse. The forum, titled, “Digital Means of Payment for Financial Inclusion “, involved the participation of the General Treasurer of Mexico, the general director of Financiera para el Bienestar (explained above), the general director of FIRA (national public fund for agriculture projects), the gerente of Guatemala’s Banrural, the deputy general manager of El Salvador’s Bancovi, the general director of CONCAMEX (the national association of savings coops), Chris Lawrence from the Interledger Foundation, Paula Hunter from the Mojaloop Foundation, Warren Carrew from Infitx, James McAndrews who was at the NY Fed, two of the three main SPEI providers in Mexico, a UCLA specialist on migration and remittances, and the director of SPEI and clearinghouses of the Bank of Mexico. This combination of public, social and private perspectives brought forward a very interesting discussion that was a great omen for the public launch of the People’s Clearinghouse. You can find here a short video of the visit to a community bank and its members (Yecapixtla, Morelos), organized for panelists at the Public Forum:

You can view the full agenda of the Public Forum with links to each panel by clicking in the following image:

What’s Next?

In the coming months we’ll be following up on the authorization process with the Bank of Mexico, so we can finalize it as soon as possible. We’ll also continue scouting for potential investors, both among international foundations and regional stakeholders. And most important of all, we’ll make sure to get all of the major savings coops of Mexico onboard this project, something that is now a very realistic scenario thanks to the alliances being discussed precisely at this moment.

In the near future we’ll visit the Atlanta Fed and Durham, North Carolina, for purposes related to the Remittances model, as explained above. As part of the same process, we’ll promote a collaboration between our BaaS partner and the Rafiki team, so that we can eventually ensure the expansion of Rafiki to the migrant communities served by several programs that work under our BaaS partner in the US.

The following weeks, and months, we’ll be intensively working on the Mojaloop deployment (both for the authorization process and for our own testing), the Rafiki-Mojaloop interoperability model (required for remittances), and the WhatsappBot PoC (useful for boosting local adoption of digital payments). All of these developments will require considerable resources and support, but we’re not worried anymore: thanks to the Interledger Foundation, we realized that a powerful idea can always find its ideal partners.

Community Support

We currently have a working group on the Rafiki-Mojaloop interconnectivity, under the lead of Alex Lakatos and Michael Richards, which has been very helpful in allowing us to measure the effort and time required to implement both technologies effectively. In a similar way, it would be very useful to start using the remittances group on Slack with fellow grantees to discuss remittances’ models and regulations. We’re sure we can be helpful to others, and their experience can help us ameliorate our own model before reaching a production stage.

We have signed an MOU with fellow grantee ThitsaWorks to work together in supporting our platform for remittances implementing Rafiki and Mojaloop. We’re sure this will be a powerful collaboration and we look forward to other grantees and allies of the Interledger Foundation joining this effort.

Additional Comments

The support of the Interledger Foundation has helped build trust in a platform that is meant to help the most marginalized communities of Mexico. If a Central Bank, a National Treasure, and the largest savings coops of the country now believe in it, it’s in great part thanks to that support. We can continue to help people like Gudelia López –account holder from our community bank in Ayotoxco, Puebla, in the picture discussing digital payments through her cellphone– transit to new payment technologies which actually help empower their communities and their regions.

The People's Clearinghouse — Grant Report #1

Roberto Valdovinos — Sat, 04 Feb 2023 04:53:12 +0000

Team image

Most of The People’s Clearinghouse team during a pause at our favorite library-café to keep on working for financial inclusion!

Project Update

The biggest win we’ve had is the constant validation of the project. The community banks we work with are not used to international forums or Central Bank meetings. They feel they don’t belong there. But with the help of the Interledger Foundation we’ve had the chance to tell the story of AMUCSS and how we can foster the impact of those community banks using open-sourced technology and innovation. First the Interledger Summit in New Orleans, then a meeting with the Bank for International Settlements, then another one with the vice-governor of Mexico’s Central Bank, then several others. We’ve left each and all presentations feeling we’re on the right path, and we’ve communicated that to the network of community banks which believe each day more and more in an innovative project whose impact wasn’t initially obvious to them.

But when getting into details, things got complicated. The authorities at the top of the Central Bank might have liked our project, but the bureaucratic structure still reigns and community banks are hardly considered real banking structures in standard executive meetings. So we’ve had to study tons of laws, rules, norms, and start understanding non-published customs and limitations. The ILP-SPEI implementation (SPEI is Mexico’s Central Bank RTGS system), for instance, seemed for the Central Bank like good wishes that would never actually take place. But that view changed when we brought forward a Mojaloop clearinghouse, explaining how it uses ILP and how we could eventually use ILP for remittances (as long as the settlement question is solved). So we’ve had to turn around difficulties to keep our objectives intact.

We are tightly following our timeline concerning legal procedures and technological research. We have a team studying the ILP and Mojaloop, and perfecting our model, and we will produce a pilot clearinghouse in the coming weeks. We’re only late in the business model itself, since we cannot yet be sure of a realistic budget for the implementation process of the hardware and software components of the clearinghouse and the costs that community banks and/or people can absorb for the new services the clearinghouse will provide.

Progress on objectives

Our main objective remains the same: to foster the impact of community banks by providing a digital solution to them that would allow them to receive fast and cheap remittances directly into accounts, and to provide them with a sound digital payment/transfer platform. And we’re counting on the ILP to help that objective.

However, the means to achieve that goal have had to adapt to new conditions: we believed we could concentrate on a SPEI platform (Mexico’s Central Bank RTGS system) and add an ILP layer to it. While that could happen in the future, the reality is that SPEI’s structure is bureaucratic and over-regulated, so we would spend too much time just trying to comply with it (and convincing the Central Bank about it). This has brought us to a more interesting (and quicker) solution: our clearinghouse initial transfer platform won’t be SPEI, but rather Mojaloop. Regulation for non-SPEI clearinghouses is much more flexible, and Mojaloop already implements ILP for its transfer process - so extending that use of ILP to remittances seems technically plausible. We’ve been working on a sequence diagram whose current version is part of this report. We’ll make it public when it’s ready and considered plausible by the Interledger Foundation and Infitx (for the Mojaloop side).

And we have structured a solution that uses FedGlobal (Fed & Bank of Mexico connection for sending money transfers) as cross-border settlement platform, but that requires that we specify which ILP nodes could participate in this process: they have to be direct (banks) or indirect participants (wallets) of FedGlobal and comply with certain conditions.

Key activities

First of all, we set up a wonderful legal team, with which we’ve been able to fully understand the most advantageous legal path for our project. We’re starting as a “Clearinghouse for payments between cellphones”, a figure created in 2013 that has been seldom used, but which gives us enough regulatory flexibility to implement a Mojaloop clearinghouse with ILP in the way we want to.

We set up the company for the Clearinghouse. If you think setting up a private company can be complicated, wait until you have to create a social company, where the main shareholder is an association of community banks, each with tens of thousands of rural owners (farmers, artisans, indigenous groups). The notary asked us for documents from each individual owner… but we survived and the company is ready to go.

We’ve also started the authorization process with the Central Bank of Mexico. We’re not done yet: procedure manuals and internal rules are taking a lot of our time, and it all should be ready before the end of March. We believe we have the support of the Central Bank for promoting rural financial inclusion, and we've been having several meeting with them to clarify goals and requirements.

Tech teams’ selection has been hard: we don’t have much money to offer, so we need people capable of working with ILP and Mojaloop and who believe in social inclusion and are willing to bet on the project rather than on the paycheck. So far we’ve been working on research, and February-March will be a defining moment as we’re starting our first pilot.

We carried out surveys with managers and tech teams of 23 community banks. They all agree remittances directly deposited into accounts would have a major impact on their community bank’s lending capacity. They are willing to invest in the process of achieving that. We also realized that the integration process with their core banking systems will not be easy, but we’re counting on a new core banking system produced by us that we’ll be implementing in those community banks with the most rudimentary systems.

We spent a week meeting remittance stores in Los Angeles, with enlightening results. The main point was understanding regulatory limits and how they are lived by remittance senders. So we tried to send money to a community bank account not connected to the national payment system but which itself has an account at a commercial bank (so ideally, remittances could be sent to that pooled account and then manually transferred to the individual beneficiary’s community bank account). It mostly didn’t work: AML regulations forbid sending remittances to a pooled account. We also got a clearer idea of the path we have to follow: working with wallets is the easiest path for our model, but eventually we could also be working with MSB licensed stores. Missing experiences include account-to-account procedures, among which the FedGlobal transfer mechanism which is currently only available between bank accounts of specific banks.

Communications and marketing

Isabel Cruz, CEO of AMUCSS and Andres Arauz, future CEO of the Clearinghouse, have promoted the project’s importance for community banks in several scenes (including meetings with the banks themselves, groups of migrants, a Bank for International Settlements’ meeting, and several Bank of Mexico meetings), including praises for Interledger Foundation’s social and open source based philosophy. There’s also an article about to be published at El Economista newspaper on the project. Finally, a policy brief about to be published by the Migration Policy Institute refers to the Clearinghouse project as the way to go to develop marginalized regions of Mexico and Central America. However, the official public launch of the Clearinghouse will be during the last month of the Grant for the Web grant, when we’ll have a community meeting and sign agreements with several community banks from AMUCSS’ network to promote the project together.

We’ve defined a public image for The People’s Clearinghouse, underlining its social approach in contrast with a company like “The Clearing House”. The latter works for and belongs to banks only; the former works for and belongs to the people. We hope you like it:

We’ve also prepared a short video, intended for community banks, to explain the benefits of The People’s Clearinghouse:

What’s next?

Following our timeline, next steps will be to continue the authorization process with the Central Bank of Mexico.

To continue our research on remittances, we’ll visit Illinois and/or Texas remittance networks, and will go to Georgia, both for a meeting with the Atlanta Fed (to be confirmed) and to visit a small community, Durham, where half of the population of San Pablito lives, one of our remittance-receiving community banks, to discuss potential adoption of our remittance model.

By the final months of the grant, the detailed use case model for remittances should be ready (in paper and approved by the Interledger Foundation), using a combination of ILP and Mojaloop. This might partially depend on Rafiki’s previous launch.

We’ll be producing a Clearinghouse pilot platform in February-March with two of our main community banks, that will allow us to verify the complexity we’ll be facing in the next months and calculate costs and pricing for our scheme.

Last but not least, we’re going public at an end-of-grant event with networks of community banks and fintech specialists, in which it would be great to have 1 or 2 people from the Interledger Foundation. The event will take place in a historically-important town close to Mexico City and will be an opportunity to sign agreements with community banks to support The People’s Clearinghouse, and a chance for those from abroad to see local, rural financial leaders in action.

What community support would benefit your project?

We are currently in need of help with the following:

Advice from the Interledger Foundation (Alex) and INFITX (Michael Richards) concerning advances on Rafiki implementations to connect ILP networks to a Mojaloop scheme.
Advice from fellow grantees (ThitsaWorks) for a pilot implementation of a Mojaloop Hub
Connections to licenced MTOs for cross-border transfer regulation (thanks to SumAssembly for a first proposal on this!).
Connections to FedGlobal team (our FedGlobal remittance model will require understanding ensuing FedNow changes with them).

Additional comments

Only that we’re very grateful for this experience. Innovation in our field is not easy: there is resistance to change, not enough resources to heavily invest in innovation, and not enough connections to enter international networks of creators and tech philanthropes. The Grant for the Web and the network that comes with it has allowed our social project to take a plausible, realistic shape faster than we had planned. We look forward to collaborating with fellow grantees and with the Interledger Foundation in this adventure.

The People's Clearinghouse — ILP Summit Reflections

Roberto Valdovinos — Wed, 18 Jan 2023 02:01:00 +0000

Introduction

As a team, at The People's Clearinghouse we're extremely happy to have been invited to be part of the ILP Summit. Our Mexico-based project aims to facilitate access to the central bank's payment system for many rural community banks. Our leading organization, the Mexican Association of Social Sector Credit Unions (AMUCSS) has, for the last decades, fostered the creation of strong social links between many community banks, and our role is to give a technological foundation to that link.

Key highlights about your participation at the Summit

The Summit proved to be a fascinating experience for all of us. We were very enthusiastic in pitching our project and received incredible support from the Interledger team and community. We immediately felt that our intentions were correct and our concepts were validated. We also developed key partnerships with many in the diverse community of developers, creators, and idealists like ourselves.

Key takeaways from the Summit

If we had to summarize what we learned at the Summit, we would say: "It's not a protocol, it's a whole ecosystem based on a protocol". Rafiki, OpenPayments, Dassie, TigerBeetle, Fynbos, GNAP, etc are all limbs/organs of an idea: it was amazing to meet in person the people behind them and realize with pride that each of these efforts aims towards a shared ideal of fair and inclusive digital financial services. But this also came with the realization that what's now required is a series of new and effective use cases that can foster adoption. On our side, we hope we can contribute to this urgent task in at least two fields: ILP use in messaging protocols for remittances, and proposing (and eventually testing) new use cases for marginalized, rural communities. On behalf of all our team, thanks to all the ILF staff for letting us be part of this great story!