Case Study
8 minutes

An extensive rural population and sporadic internet availability have resulted in a lack of banking structure in Africa. Instead, the continent has emerged as a global leader in mobile money transactions. These transactions are an important component of Africa’s financial services infrastructure, as without it, the exchange of goods and services for currency would be vastly hindered. In fact, in 2017, there were 100 million active mobile money accounts (used by one in 10 African adults), and these accounts were almost all provided by mobile network operators and telecom services.1

In terms of mobile money transactions, Tanzania follows but exceeds the trends of overall adoption. Almost 56 percent of Tanzanians are financially included, and almost 55 percent through mobile money accounts.2

As it currently stands, a majority of the Tanzanian population makes purchases via Unstructured Supplementary Service Data (USSD)-based text using a mobile phone and a mobile wallet that is managed by telecom providers. However, these transactions are subject to several fees controlled solely by the provider. In addition, incompatibility of some merchants with different telecom providers, as well as user error, can introduce obstacles that can make money exchange and purchases difficult, if not impossible. The current system also requires users to put money on a mobile account with one merchant before they can pay another, creating a several-step process before transactions are completed.

Enter the founders of MJDS BrainTek, Meddy Abeid and Tilak Patel, who hoped to recreate a system implemented in other African countries, in an effort to simplify and facilitate easier transactions between customers and merchants in Tanzania. They wanted to identify a way for people to reduce the extraneous steps and fees, implement direct pay, and create a closed-loop payment system.

In order get a solid understanding of how such a system might work in Tanzania, BrainTek turned to Softjourn, Inc., a U.S.-based virtual software development and consulting company.

Making Transactions Easier

Currently in Tanzania, and many other areas in Africa, to purchase an item from a merchant, a customer sends a USSD-based text from a cell phone. Because the transaction is cashless, money for both sides of a transaction are stored in mobile phone wallets through one of Tanzania’s telecom providers.

This leaves both buyers and sellers exposed to a host of issues. Telecom providers can and do charge both transaction participants a fee, which can quickly add up. In addition, much of the process relies on number codes. Users check their balance via a special number combination, and merchants also have special codes that buyers must use during the checkout process. To shop, a buyer must dial the merchant’s phone number and then a special code, confirm action, provide amount, and confirm the purchase. This creates several opportunities for mistyping errors, possibly voiding a transaction, or worse, sending money to an incorrect party. The entire process is also quite time-consuming.

In addition, just over half of the 282 mobile money services operating worldwide are located in Sub-Saharan Africa.3 This means there are several different providers operating within Tanzania that don’t always “talk” to each other, resulting in incompatibility problems between providers.

After witnessing a better solution in some areas of Africa, which both removed obstacles and ensured transactions were completed correctly, quickly, and more securely, BrainTek leveraged Softjourn’s experience to do the initial groundwork.

We did not want to be in a position where we started development and then got to a point where we should have defined something upfront and did not know where or how to go forward, said BrainTek CEO Meddy Abeid about the decision to partner with Softjourn.

Softjourn is a third-party software development resource that businesses use to develop new applications and systems from the ground up. It offers nearly two decades of virtual software development experience to clients in the U.S., U.K., and Europe, handling the work from its development hubs in the Ukraine and Poland.

These two entrepreneurs had an idea, and they wanted to explore more in detail how realistically it could work. They worked with Softjourn to define how all the different players would work within the system, how money was going to be transferred between the different parties, and how money and accounts were going to be settled, says Softjourn CEO and COO Emmy Gengler.

At the end of the project, Softjourn presented the requirements for development of a system it calls MOJA, which means ‘one’ in Tanzania’s Swahili language.

Blueprints for a Better System

A study by Research ICT Africa4 found that 46 percent of urban dwellers and 86 percent of rural dwellers in Tanzania remain unconnected to the internet. Of those that are connected, it’s generally through the use of smartphones.

Because of this, Softjourn designed MOJA to work on the mobile wallet system connected to a telecom provider, just as the current system does. This also allows users to continue to use their phones to manage and maintain their mobile accounts.

However, MOJA relies on radio-frequency identification (RFID) devices, a point-of-sale (POS) terminal, and mobile apps for both to complete transactions. This will, ultimately, remove telecom providers from every step of a purchase, limiting burdensome fees. In addition, it would allow transfers between several different providers. And because there are no numbers to type, it helps to eliminate user error. MOJA requires that customers be issued RFID devices, which, for example, can take the form of a card or wristband that is programmed and linked to the processing server. For merchants, it requires a POS system set up by MOJA officials.

To register, both a customer and a merchant have to provide valid identification, including national/business ID numbers. All information is verified by a MOJA administrator. As part of the registration process, login credentials and a security question are also required to provide an extra layer of account security. Once set up, customers and merchants can use the login to access their mobile wallet account.

To make and complete a purchase, the system works very much like credit card systems. The total price of a transaction is entered on a POS device. Then the user presents their RFID device (in this case, taps it on the POS device) to initiate payment, and the backend processes validate the transaction.

Because MOJA still needs to access a mobile wallet account, its server will communicate with the mobile provider via a specially designed API.

MOJA is designed to be USSD-based if an internet connection isn’t present, so it can work with both smartphones and non-connected cell phones.

In the MOJA system, only merchants are charged processing fees, though telecom provider fees still apply for any mobile banking account transactions. All the money accumulated during the week from purchases will be stored in the MOJA system. Once a week, MOJA administrators forward merchants the total amount of all purchases made at their store during that week, and withdraws the amount of fees the merchant owes MOJA and the telecom provider.

In addition, the system includes a smartphone application, which allows customers and merchants to manage their account, see transaction history, access reports, and much more.

The MOJA transaction process

  1. Merchant enters a total price of all items purchased on the POS device.
  2. Customer taps with the card or wristband.
  3. POS device sends the request to the Processing Server to check customer’s authorization.
  4. Processing Server verifies the RFID details to confirm that this customer is registered in the database.
  5. If not successful, the error notification is displayed on POS device.
  6. If the information is valid, Processing Server sends request to run transaction through the API to Telecom Operator.
  7. Telecom Operator validates the data received (for example, if there is enough money on the account, if the number to which the money will be transferred is valid).
  8. If the data is valid, Telecom Operator requests the confirmation of sender’s intent to purchase an item.
  9. The confirmation flow varies depending on the Telecom Operator.
  10. Confirmation is received by Telecom Operator and is being processed.
  11. If the data is valid Telecom Operator approves the transaction.
  12. Telecom Operator transfers money and returns a response about the performed transaction to the Processing Server.
  13. Processing Server sends successful message to the POS device.
  14. Status of the transaction is displayed on POS device (success/fail).
  15. Customer/merchant gets an SMS confirmation from Telecom Operator regarding the transaction.
  16. The transaction record is saved to customer/merchant mobile application in the Transaction History menu option.

Guiding Clients from Concept to Implementation

While creating the blueprint for MOJA was part of the project, it was only a part of the custom service that Softjourn provided to BrainTek. Softjourn specializes in helping its clients take a concept through to completion. From consulting on start-ups to building out an entire blockchain system, the company is a valuable partner for those who use its services. In the case of BrainTek, Softjourn representatives guided the founders through the MOJA blueprint, from the initial idea to how it would work in real life, as well as how BrainTek could make money as the facilitating company.

We walked them through the entire process, with all of the users from beginning to end, to be able to define that entire flow. They went from an idea and concept, which they had seen working from the outside, to now having a full understanding of how it works front end and back end, said Gengler.

Because the clients in this case did not come from the financial industry, Softjourn also brought in a payments consultant as part of the process to assess what they did and did not know and how the concept would work. It also created and handed off the documentation and blueprints of the MOJA system, so BrainTek could show them to potential investors and pitch the idea to mobile phone companies.

Softjourn guides you through your journey in baby steps until you reach that pinnacle stage where you can actually go to the real world with your idea, said Abeid. Without them, it would have taken a quite a bit of time to get where we are right now.

1,3McKinsey & Company (2018). Mobile financial services in Africa: Winning the battle for the customer. Accessed February 1, 2020.
2Financial Inclusion (2018). Tanzania At A Glance. Accessed February 11, 2020.
4Research ICT Africa (2017). Cost of smartphones continues the digital divide in Tanzania. Accessed February 15, 2020.