The Telecom Regulatory Authority of India (TRAI) has proposed reducing tariff for unstructured supplementary service data (USSD)-based mobile banking and payment services from Rs 0.50 to zero. This move is aimed at protecting the interest of feature phone users and boost digital infrastructure inclusion.
The USSD is a service that uses a short code for making transactions or inquiries. Since it does not need data connection, the service is used by a large majority of people, primarily feature phone users.
According to TRAI, the present tariff of Rs 0.50 per USSD session is several times higher than the average tariff for a one minute outgoing voice call (Rs 0.04 per minute), or an outgoing SMS (Rs 0.01) per text message. A consumer is charged for both successful as well as unsuccessful transaction, which puts extra financial burden on the users.
In its draft order, TRAI said the Department of Financial Services (DFS) had requested it to “waive USSD charges to facilitate faster adoption of these services” by common people, especially in rural/difficult areas.
In this context, the reserve bank of India (RBI) has also constituted a high-level committee on deepening of digital payments. The key recommendation of the panel is that the USSD usage charges should be further rationalised and technology be made feature-rich to increase adoption and popularity.
Further, TRAI may review changes after two years, based on experience gained. It has invited stakeholder comments on the new draft latest by December 8, 2021.