TRAI starts review of tariffs for mobile banking messages

In a bid to push usage of mobile banking, telecom regulator TRAI today sought public opinion on a range of issues, including review of tariffs for USSD message based banking service and who should pay for it -- bank or customers.

With about 22.5 crore Jan Dhan accounts in the country and more than 100 crore mobile connections in the country, it was expected that the USSD-based mobile banking service would gain popularity amongst the unbanked and under-banked population.

"However, even after two years since August 2014, when it became available to all GSM subscribers in the country, the progress of USSD-based mobile banking is below expectations," TRAI said.

"In May 2016, only about 37 lakh mobile banking transaction attempts (over USSD channel) reached NPCI's platform. Clearly, something is amiss," Trai said in the consultation paper.

The Unstructured Supplementary Service Data or USSD messages are those messages which are widely used to inform pre-paid consumers about deduction of balance after each call or SMS they make or send. These messages cannot be stored in mobile phone.

Using short codes on USSD platform like *121#, people are able to check their balance and subscribe to telecom services.

In case of mobile banking such codes allow account holders to access different services like checking bank balance, fund transfer etc.

At present, Trai's rule cap USSD rate at Rs 1.5 per session. The regulator has received requests from various authorities involved in banking services to reduce the rate of USSD session.

"Clearly, the present tariff per USSD session for mobile banking offered by TSPs (telecom service providers) is several times higher than the average tariff for -- a Minute of outgoing voice call, or an outgoing SMS, or an MB of data transfer," Trai said.

The telecom operators have opposed lowering of tariff.

Trai, in the paper, has sought opinion on various issues including method for prescribing the tariff and "Whether the present pricing model for USSD-based mobile banking in which consumers pay for the use of USSD should continue".

The regulator has set August 31 as last date for comments and September 14 for counter comments.