NEW DELHI: In a move to boost financial inclusion, telecom regulator Trai has scrapped the charges levied on USSD messages, which are mostly availed 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 on Thursday decided to scrap charges levied on USSD (Unstructured Supplementary Services Data) updates.
USSD sends out text messages without requiring internet connection on a mobile phone.
These text messages are different from SMSes and telecom companies frequently use the USSD technology to alert users about their balance after a call or a SMS.
So far, the charge was 50 paise per USSD session.
In a communication, Trai said no charges will be levied for USSD for mobile banking and payment service, and it has been implemented with immediate effect.
The decision has been taken following consultations with the stakeholders, the Telecom Regulatory Authority of India (TRAI) said, adding that it will keep a watch on the progress of service, and may review the charge for a period of two years.
"After analysing the comments received from stakeholders and other data/ information available with it, the authority is of the view that to protect the interests of the USSD users and to promote digital financial inclusion, rationalisation of USSD charges is required.
"In view of the same, the authority has decided that the subscribers will not be charged for USSD for mobile banking and payment service," the regulator said.
While smartphone penetration is increasing in the country, there is a vast majority of mobile users who dont have access to internet and still operate on feature phones.
In this scenario, USSD based transactions become crucial in enabling digital transactions.
In 2013, Trai had prescribed a ceiling of Rs 1.5 per USSD session, which was further reduced to 50 paise per session in October 2016.