Trai proposes cutting USSD charges for mobile banking to zero, Telecom News, ET Telecom

Trai proposes cutting USSD charges for mobile banking to zero, Telecom News, ET Telecom

Kolkata: On Wednesday, the telecom regulator proposed reducing tariffs on USSD-based mobile banking and payment services to zero from 50 paise in an effort to protect the interest of users of feature phones and increase digital financial inclusion.

“The regulator proposes to revise the framework for USSD-based mobile banking and payment services by prescribing a ‘zero’ fee per session, as rationalization is a necessity to protect the interests of target groups and promote digital financial inclusion,” Telecom Regulatory Authority of India (Trai ) said in its draft telecommunications tariff (66th Amendment), announced on Wednesday.

It said, however, that it “may revise the charge after two years, based on experience”. The supervisory authority has set a deadline of 8 December for stakeholders’ comments on the new draft regulation.

USSD (Unstructured Supplementary Service Data) is a service that uses a short code to make transactions or queries. Since it does not need a data connection, the service is used by a large majority of people, primarily telephone users, and is therefore also used as a medium for simple banking transactions.

Trai attributed its call for rationalization to the fact that the current tariff of 50 paise per. USSD session is several times higher than the average rate for a one minute outgoing voice call (Re 0.04 per minute) or an outgoing SMS (Re 0.01 per SMS). message).

The relatively high fee for a USSD (session), it said, “acts as an obstacle” in increasing the number of transactions despite significant improvements in success rates.

The regulator added that “a consumer is also being charged for both successful and unsuccessful transactions,” adding an additional financial burden due to USSD’s potential popularity among rural, underprivileged and low-income groups.

In its draft executive order, Trai said the Department of Financial Services (DFS) had called for “waiving USSD charges to facilitate the faster introduction of these services” by ordinary people – especially in rural / difficult areas – the population segment for whom Pradhan Mantri Jan Dhan Yojana (PMJDY) account scheme was established to promote economic inclusion.

In this context, the sector regulator said that the Reserve Bank of India (RBI) had also formed a high-level committee on deepening digital payments (CDDP). And a key recommendation from the panel is that “the charges for USSD use be further rationalized and the technology made functional” to increase adoption and popularity.

In fact, the USSD service is used by many feature phone users to check the balance of their bank accounts, make peer-to-peer money transfers, cash withdrawals and deposits from small town and rural bank correspondents. With increasing mobile penetration in rural India, the mobile phone is seen as a powerful tool to promote digital economic inclusion.

Back in November 2016, the sector regulator had reduced the rate per. session for USSD-based mobile banking transactions for 50 paise from Rs 1.50 previously.


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