TRAI Removes USSD Fee Related to Mobile Banking and Payments to Boost Digital Economy

The Telecommunication Tariff (68th Amendment) order issued by TRAI on Thursday stated that rationalisation of USSD charges is necessary keeping in mind the interests of USSD users and promoting digital financial inclusion. TRAI made the decision of subscribers not to be charged for USSD for mobile banking and payment service keeping in mind the comments received from the stakeholders.

Highlights

  • The decision was taken keeping in mind the interests of USSD users.
  • TRAI did state that it may review the charge after two years.
  • Telcos had requested TRAI to go for a graded cut in tariffs for USSD-based mobile banking and payment services.

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TRAI Removes USSD Fee

In the latest development of events, the telecom sector regulator has eradicated tariffs for Unstructured Supplementary Service Data (USSD)-based mobile banking and payment services from 50 paise per session earlier. The move comes in despite the concerns posed by telcos in order to boost digital financial inclusion and protect the interests of ordinary feature phone users. The new tariff order from the telecom regulatory authority of India (TRAI) is applicable from Thursday.

The Move to Rationalise USSD Charges

The Telecommunication Tariff (68th Amendment) order issued by TRAI on Thursday stated that rationalisation of USSD charges is necessary keeping in mind the interests of USSD users and promoting digital financial inclusion. TRAI made the decision of subscribers not to be charged for USSD for mobile banking and payment service keeping in mind the comments received from the stakeholders. However, TRAI did state that it may review the charge after two years as it will be keeping an eye on the progress of such USSD services.

The USSD service is majorly used by feature phone users for things such as checking the balance in the bank account, cash withdrawals, transfer of money and more as these services do not require an active internet connection. The mobile ecosystem is expanding deep into rural India and is a prominent tool in promoting digital financial inclusion. Earlier in November 2016, TRAI had cut the per-session rate for USSD-based mobile banking transactions to 50 paise from Rs 1.50.

Telcos showed concerns over the move of making these services free in their submissions back in December, stating that it may increase the financial problems for the in-debt telecom sector. Telcos had requested TRAI to go for a graded cut in tariffs for USSD-based mobile banking and payment services.

However, the latest order from TRAI to rationalise the USSD charges comes on the back of the fact that the current tariff of 50 paise per USSD session was several times higher than the average tariff for a one-minute outgoing voice call which is about Rs 0.04 per minute. TRAI also mentioned in its explanatory memorandum that total revenue generated through USSD mobile banking sessions constitutes only about 0.00007% of the total revenue of the telecom sector.

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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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