India cuts USSD charges to boost mobile banking 

India's Telecom Regulatory Authority announced a cut in the maximum fee for USSD banking, in an effort to support mobile payment services. Effective immediately, the maximum cost per USSD session is INR 0.50, down from INR 1.50 previously. In addition, the maximum number of steps to complete a USSD transaction increases to eight from five, in order to allow for more complicated transactions over mobile phone. Trai said the lower price will help increase access to financial services, especially in rural areas where more and more people have mobile phones.

Usage of mobile banking and payments has increased in India since early this month when the government announced that the low-denomination INR 500 and 1,000 notes would no longer be legal tender. This is part of efforts to root out 'black money', where payments in cash are used to evade taxes.

To support small payments, mobile operators such as Bharti Airtel and Vodafone India have waived mobile banking USSD fees until year-end. Communications minister Manoj Sinha confirmed the news on Twitter, saying telecom operators had agreed to not charge for mobile banking transactions through 31 December.

The BBC reports that the government's action has also sparked increased use of digital wallets. The country's largest digital wallet firm, Paytm, said it logged a record of over 7 million transactions on 19 November. Paytm, which supports payments such as mobile top-ups, utilities, entertainment and transport tickets, claims to have 150 million users, while its nearest rival MobiKwik has 35 million.

Source:Telecom Paper