Trai proposes nil charge on USSD messages for mobile banking, payments

Telecom regulator Trai on Wednesday proposed to remove charges on USSD messages for mobile banking and payment services to promote digital transactions.

The Unstructured Supplementary Service Data (USSD) messages get displayed on the screen of mobile phones and are not stored like SMSes. This technology is widely used to display balance deduction in mobile phones where a message pops-up on the device screen after a call or outgoing SMS.

At present, the Telecom Regulatory Authority of India (Trai) has capped the price of a USSD session at 50 paise where each session can be completed in eight stages.

The suggestion to remove charges has been made by a high-level committee on deepening of digital payments constituted by the Reserve Bank of India (RBI) with a view to encouraging digitalisation of payments and enhancing financial inclusion.

The recommendations made by the committee are supported by the Department of Financial Services (DFS).

Trai, in a statement, said following a request from the DFS to the Department of Telecommunications in this regard, the Authority analysed the issue from various aspects and is of the view that in order to protect the interests of the USSD users and promote digital financial inclusion, rationalisation of USSD charges is required.

"Accordingly, the Authority proposes to revise the framework for USSD based mobile banking and payment services by prescribing a 'Nil' charge per USSD session for mobile banking and payment service, while keeping the remaining items of USSD unchanged," Trai said.

The regulator said the present tariff per USSD session for mobile banking offered by telecom service providers (TSPs) is several times higher than the average tariff for one minute of outgoing voice call, or one outgoing SMS.

"Considering the decline in charges for other services, the rationalization of USSD charges is required to increase the number of USSD transactions," Trai said.

The regulator has invited views of stakeholders on the draft proposal by December 8.