The Indian government has convinced the country’s operators to open their USSD data channels up to banks, according to Economic Times.
The USSD-based service will include funds transfer, balance enquiry, change of PIN and mini statement, as well as low-value bill payments.
Over the last two months, 10 operators have signed agreements with the country’s National Payments Corporation of India (NPCI), the government-backed payments gateway.
“The primary reason for the delay in setting up this infrastructure was the apprehension of telcos that their business will be affected if they provide the USSD channel to the banking system,” said AP Hota, MD & CEO of NPCI.
Users will be charged INR1.50 (2.5 US cents) for each transaction.
But the Cellular Operators Association of India (COAI) argued that USSD is an increasingly elderly technology that is not suited to carrying large volumes of data.
“Also, we didn’t want to be reduced to dumb pipes…The initial interconnect charges which we were offered were very low. Then Trai [India’s telecoms regulator] intervened and the charges were raised,” said Rajan Mathews, COAI’s director general.
He added the charges now reflected operator’s costs. While the banks will handle areas such as quality of service and customer care, the operators just provide access, he added, in line with Trai’s mandate.
Where the USSD-based services are significant is that, unlike existing mobile wallets, they enable inter-bank transactions. For instance, a subscriber to one mobile operator can send money from their bank account to the account of a subscriber with a rival operator.
Mobile wallets are standalone accounts, which are separate from the accounts held by users with their banks.