In a bid to improve financial inclusion, the Telecom Regulatory Authority of India (TRAI), the country's telecom regulator, has cut rates to a third for USSD-based mobile banking transactions. TRAI has lowered the tariff to a maximum of 50 paise per transaction from the earlier rate of Rs1.50 per session.
'Unstructured supplementary service data' or USSD is a mobile system used to send text between a mobile phone and an application program. USSD uses short codes to make transactions or inquiries such as checking balance talk time or present bill among others.
''This is based on the recommendations of the banks, the Reserve Bank of India, while we also consulted National Payments Corporation of India (NPCI),'' Trai chairman RS Sharma said.
More than 65 per cent of India, who own feature phones, use USSD Sharma said, adding, that high price was one of the reasons behind low usage of this medium for making mobile banking transactions.
More than 84 lakh transactions were recorded in October itself, he added.
The move was welcomed by telecom operators in the country.
''To support customers during the ongoing demonetisation exercise, Bharti Airtel has waived off transaction charges for all USSD-based mobile banking transactions over its network till December 31, 2016. We would encourage customers to leverage this benefit for their convenience,'' an Airtel spokesperson said.
Welcoming the government's initiatives to accelerate India's progress into a less cash economy, Sunil Sood, MD & CEO, Vodafone India, said,
''Vodafone India is committed to help actualise the Government's several initiatives designed to make India a digital economy. To ease the burden of masses, we are waiving off all USSD charges presently levied for mobile banking till December 31, 2016. As several million customers use feature phones, we are hopeful that this free access to mobile banking will encourage them to adopt it as their preferred and convenient mode for banking,'' said Sunil Sood, MD & CEO, Vodafone India.
''Further, with Vodafone M-Pesa we are leveraging the reach of mobile technology to drive financial inclusion and offer the convenience of a digital wallet for easy transactions. The unique cash out feature of Vodafone M-Pesa makes it the ideal digital wallet for masses, enabling users to digitise cash, remit it to family and friends, pay bills and/or withdraw it at their convenience from over 120,000 touch points across the country,'' he added.