Trai slashes USSD tariffs to boost mobile banking services in India

Credit: Vladimir Zhoga /

The Telecom Regulatory Authority of India (Trai) says it has lowered the ceiling tariff for USSD in order to boost mobile banking and payment services that use USSD short codes.

Trai said in a press release Tuesday that it has reducing the present USSD ceiling tariff from 1.50 rupees to 0.50 rupees.

Trai said it also amended its Mobile Banking (Quality of Service) regulations to increase the number of stages from five to eight per USSD session.

Together, the amendments will facilitate the banks, their agents or any entity authorized by the Reserve Bank of India for better delivery of banking and payment services to the consumers through mobile phones over USSD,Trai said in a statement.

Trai has long seen mobile phones as a channel for sparking financial inclusion and banking the unbanked or under-banked, and established a framework in November 2013 to enable bank agents to work with access service providers to use SMS, USSD and IVR channels to provide mobile banking services at a prescribed ceiling tariff of 1.50 rupees per USSD session for USSD-based mobile banking services.

However, Trai said, the initiatives haven’t quite taken off as envisioned, with both the number of transactions and the overall success rate below expectations.

Trai said the new rules “will be instrumental for achieving greater financial inclusion in the country and contribute to the fulfillment of an important aspect of Digital India’ by encouraging [a] less cash’ society.”

However, Trai added that tariff levels are just part of the problem. Other areas to revisit to boost financial inclusion include “the architecture of the USSD framework by NPCI for improving software design elements; increasing consumer awareness through a time-bound, targeted communication strategy; putting in place a mechanism of linking bank accounts with mobile phones through a simplified process.”

Meanwhile, India’s telecoms operators are reportedly taking advantage of the tariff cut to offer USSD usage for free until the end of the year, reports Press Trust of India.

The USSD fee waiver was announced in a series of tweets from Telecom Minister Manoj Sinha:

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