In a bid to boost financial inclusion, telecommunications regulator Trai has removed fees levied on USSD messages, which are primarily used by feature phone users, for transactions related to mobile banking and payment services.
USSD is a mobile short code that enables financial and banking transactions even on feature phones.
With immediate effect, the regulator decided on Thursday to scrap fees levied on USSD (Unstructured Supplementary Services Data) updates. USSD sends text messages without requiring an internet connection on a mobile phone.
These text messages are different from SMS and telecommunications companies frequently use USSD technology to alert users to their balance after a call or SMS.
Until now the charge was 50 paise per USSD session.
In a communication, Trai said that no fees will be charged for USSD for mobile banking and payment services, and that it has been implemented with immediate effect.
The decision was taken following consultations with stakeholders, the Telecommunications Regulatory Authority of India (TRAI) said, adding that it would monitor the development of the service and may review charges over a period of two years. .
“After analyzing the feedback received from stakeholders and other available data/information, the authority is of the opinion that to protect the interests of USSD users and promote digital financial inclusion, a rationalization of the fees for USSD is required.
“In view of the same, the authority has decided that subscribers will not be charged for USSD for mobile banking and payment services,” the regulator said.
While smartphone penetration is increasing in the country, a large majority of mobile users lack internet access and are still operating on feature phones. In this scenario, USSD-based transactions become crucial to enable digital transactions.
In 2013, Trai prescribed a cap of Rs 1.5 per USSD session, which was further reduced to 50 paise per session in October 2016.
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