TRAI

The Telecom Regulatory Authority of India (TRAI) is mooting for a unified platform which can support all variety of mobile payment services including merchant payments, utility bill payments, mobile and DTH recharge through USSD. This was suggested by the department of financial services (DFS), the department of economic affairs (DEA) and the National Payments Corporation of India (NPCI) promoting a more cashless society to enable financial inclusion.

“In order to move towards a less-cash and more digital payment transaction society, prima facie, there appears to be merit in the request of DFS, NPCI and DEA to enable a unified USSD platform which can support all mobile payment services apart from the mobile banking services,” TRAI said in its consultation paper (PDF).

The consultation paper is also looking at ways to increase mobile banking through USSD and TRAI has also suggested increasing the number of stages and decreasing charges in a single session.

The NPCI is currently acting as an aggregator for mobile banking through the USSD code *99#. The paper noted that though all GSM telecom operators were connected to *99# by August 2014 and that the progress of USSD-based mobile banking is below expectations. In May 2016, only about 37 lakh mobile banking transaction attempts reached NPCI’s platform. 

In contrast, the RBI says that there were more than 572 million mobile banking transactions which includes applications as of March 2016.

Reasons for slow uptake

– Currently, a USSD mobile banking session will allow five stages. The paper argues that this is a challenge in creating a customer friendly menu for USSD-based mobile banking, which results in input error or time delay and eventually leads to transaction decline. For example, a customer needs to enter about 23-29 digits to send money over USSD which includes the recipient’s account number, IFSC code and mPIN.  A mistake while entering these digits would lead to the transaction being declined and the customer would lose trust in the service and not use it again.

– The NPCI has mooted for removing the upper limit in the stages of a USSD transaction while the RBI and the DFS want to increase the number of stages from 5 to 8.

– A single session costs Rs 1.5 regardless of the transaction being successful or not. The RBI wants a single session charge to be lowered but does not specify how much. While the DFS requested for reduction of tariff for USSD session with an upper limit of Re. 0.50 for two years and ensure that charges are levied only on successful transactions. The NPCI suggested that only succesful transactions be charged and and other options such as monthly subscription based pricing may also be explored.

TRAI also pointed out that the tariff for average outgoing voice call was Rs 0.47 per minute, the average tariff for outgoing SMS was Rs 0.15 and the average tariff for data transfer was Rs 0.22 per MB.

Questions asked in the consultation paper

Stakeholders need to send their written comments by 31 st August, 2016 and counter-comments by 14 th September, 2016 to the Advisor (F&EA), TRAI. The comments and counter-comments may also be sent by e-mail to advfea1@trai.gov.in.

Q1: In your opinion, what should be the maximum number of stages per USSD session for mobile banking service: (i) Five (ii) Eight (iii) Unlimited (iv) Any other (please specify) Please provide justification in support of your response.

Q2: Which of the following methods is appropriate for prescribing the tariff for USSD based mobile banking? (i) Cost-based tariff for outgoing USSD session for mobile banking; or (ii) Monthly (or periodic) subscription fee for the use of USSD for mobile banking services; or (iii) Any other method

Q3: What methodology should be used for estimating the cost per USSD session for mobile banking service?

Q4: If your response to the Q2 is ‘Any other Method’, please provide full details of the method.

Q5: Whether it would be appropriate to mandate the service providers to levy charges for USSD session for mobile banking only if the customer is able to complete his/her transaction? If yes, please describe the method to implement such an arrangement technically?

Q6: Whether the present pricing model for USSD-based mobile banking in which consumers pay for the use of USSD should continue?

Q7: In case your response to the Q6 is in the negative, what should be alternative pricing models? Please provide justification in support of your response.

Q8: Keeping in view the concerns raised by the TSPs, whether there is a need for allowing USSD push sessions when customer-initiated USSD session is dropped due to some reason so that the customer can complete his/her unfinished transaction? Please support your response with justifications.

Q9: Whether it would be appropriate to allow all variety of mobile payment services apart from the mobile baking services on the existing USSD Aggregation platform(s)? Please support your response with justification.

Q10: Is there any other relevant issue which should be considered in the present consultation on the review of regulatory framework for the use of USSD for mobile financial services