Payment solutions provider Visa has alleged that its mobile payments service has been restrained by Indian telcos, reports The Economic Times.

While the company hasn’t mentioned any specific telecom operator, Visa has alleged that telcos have selectively offered USSD (Unstructured Supplementary Service Data) service to a few banks while they have refused the same service to Visa since its mobile payments service competes with Bharti Airtel’s Airtel Money and Vodafone’s m-Paisa service, as indicated by the report.

Visa-Monitise JV

In May 2010, Visa had setup a joint venture with the UK based mobile payments solutions provider Monitise for the Indian market called Movida. Through this venture, the companies were providing a technology platform for financial institutions and mobile network operators in India, to offer services such as banking, bill payments, mass transit ticketing, mobile top-up and others to consumers. In February 2012, Movida had inked an agreement with HDFC Bank to introduce an USSD-based mobile payments service. The new service was expected to allow HDFC Bank customers to pay bills, top up prepaid airtime and buy tickets from their mobile phones, and was expected to be available across all mobile networks using any Visa or non-Visa branded payment account.

The company had stated that the service was initially being offered to select customers who were able to link their HDFC Bank cards to their mobile phone numbers, with plans to roll out the service across the country later in the year. Speaking to the publication, Visa’s group country manager for India and South Asia, Uttam Nayak however claimed that telcos had informed them that they will not be providing their own network resources for the company to compete against them and that they have blocked its access to their USSD platforms for the past year.

Telcos still testing the service?

Rajan S Mathews, Director General – COAI (Cellular Operators Association of India) has however denied these claims to the publication, stating that none of its member companies have blocked the USSD channel. He also stated that telcos want to assist mobile banking services in the country and pointed out that several discussions have previously happened between banks, National Payments Corporation of India (NPCI) and Telecom Regulatory Authority of India (TRAI) on offering USSD platform as a commercial service. However, he added that telcos were currently addressing various issues like revenue sharing, infrastructure capacity, quality of service, USSD numbering and signalling channels requirement, which have to be resolved before offering USSD services on a commercial basis.

A Vodafone spokesperson also stated to the publication that they were currently testing USSD services with select partners on an experimental basis to assess the customer usage and the industry is currently checking out various options, revenue model and the investment required to offer the service of a requisite quality.

Visa-UIDAI Tieup

In a separate development, Visa has tied up with Unique Identification Authority of India (UIDAI) to build a payment service on top of the Aadhaar platform to aid financial inclusion and improve the electronic payment scenario in the country, reports The Hindu Business Line. Visa stated that it would be leveraging Aadhaar’s biometric fingerprint recognition technology through this partnership, to link an user’s Aadhaar number to their card number and their phone number.

Last month, Visa had tied up with five Indian banks to launch an instant prepaid card service called Saral Money, which allowed users to open a bank account using their Aadhar card for know your customer (KYC) validation. The service is initially available in Delhi-NCR and is expected to be rolled out in the rest of the country by the end of 2014, in a phased manner.

Other USSD Services

In November 2012, NPCI had rolled out National Unified USSD platform (NUUP) based mobile banking service in a bid to increase IMPS based transactions. Through this service, users could dial *99# short code on their handset to access various banking services. The service was available on MTNL and BSNL and covered 23 member banks of NPCI. NPCI had stated that it will eventually roll out the service on other telecom operators, however it will be limited to GSM operators only since it is an USSD-based service.

In July 2012, BSNL had partnered with State Bank of India (SBI) to launch its mobile banking services on USSD platform. Through this service, BSNL subscribers who had an SBI account, were able to carry out all major banking transactions including Money Transfer, Mobile to Mobile Fund Transfer, Balance Inquiry, Mobile Top-Up/Recharge, Mini Statement, Checkbook issuance, Prepaid Mobile Recharge and Postpaid Bill payment. The service was priced at Rs 15 per month.

In May 2012, Bharti Airtel had inked a similar tie up with Axis Bank to launch Airtel Money Super Account powered by Axis Bank, which essentially offered a no-frills accounts with the bank on Airtel’s mobile platform. The service was made available to Airtel customers as a USSD service and allowed Airtel Money users to deposit and withdraw money from any of the four locations – Mumbai, Delhi, East UP and Bihar.


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