TRAI Proposes Zero Tariff Charges on USSD Transactions

TRAI went ahead to explain that the current charge for an outgoing phone call is Rs 0.04 per minute whereas for an SMS is Rs 0.01 per text message. The current tariff charges for USSD surpass both the aforementioned charges and therefore there is a need for rationalization.

Highlights

  • The higher charges of USSD sessions are ‘acting as an impediment to the rising number of transactions.
  • The USSD charges apply in both scenarios whether the transaction is successful or not which increases the financial load on the users.
  • Previously in 2016, the USSD charges were reduced to 50 paise from Rs 1.50.

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The Telecom Regulatory Authority of India  (TRAI) has issued a proposal on Wednesday where it has suggested reducing tariffs for USSD based mobile banking and payment services to zero from 50 paise. The proposal has been issued in order to protect the interest of feature phone users and moreover, boost digital financial inclusion. The Unstructured Supplementary Service Data or USSD is a service that uses a shortcode for making transactions. A lot of people, mainly feature phone users use this facility as it doesn’t require any internet.

The Need to Rationalize USSD Charges

TRAI went ahead to explain that the current charge for an outgoing phone call is Rs 0.04 per minute whereas for an SMS is Rs 0.01 per text message. The current tariff charges for USSD surpass both the aforementioned charges and therefore there is a need for rationalization. TRAI said that even though there is an improvement in success rates, the higher charges of USSD sessions are ‘acting as an impediment to the rising number of transactions.

USSD is also more common among the people in rural areas, those who are under-privileged or come under low-income groups. The USSD charges apply in both scenarios whether the transaction is successful or not which increases the financial load on the users. According to the draft by TRAI, the Department of Financial Services (DFS) has also requested to relinquish the USSD charges so it can be adopted among the common masses especially those who belong to rural or difficult areas.

Even the Reserve Bank of India (RBI) had formed a committee that would focus on further improving the quality of digital payments. One of the major recommendations from this high-level committee was to rationalize the USSD charges and the technology should be made feature-rich so that it gets its popularity and adoption by the people as informed by the telecom regulator of the country.

Mobile phone usage increasing and seeping through in the core places of India which includes rural areas at remote places. Thus the mobile devices play a crucial role in deepening the digital payment method in the country. Previously in 2016, the USSD charges were reduced to 50 paise from Rs 1.50.

Reported By

Anupam has been a tech enthusiast for a while and is always on the feet to know about the new launches whether it is smartphones or any other devices. He’s trying to share this passion with the help of his writing skills. Apart from these he’s also a pursuing freelance digital artist and loves creating artworks.

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