NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, November 24, 2014

Banking will have a new look with some of the jigsaw pieces slowly falling into place. Almost all dealings between a customer and her bank will be possible with a basic handset and without accessing the Internet.

The telecom regulator will soon ask telcos — many of which have been resisting for years — to enable bank-authorised mobile payment companies to offer such service. Telecom companies are expected to fall in line with local and international payment companies, including an associate company of Visa, lobbying with the regulator and the government for permitting them to tap the Unstructured Supplementary Service Data (USSD) channel of telcos.

The USSD channel is a simple interactive text messaging system that can be used by a mobile phone subscriber to reach out to her bank for anything — transfer funds, check balance amount, pay bills, cancel a cheque, request for a cheque book, obtain an account statement, and even buy books and music using debt or credit cards. Customers – without 2G or 3G connectivity or a smartphone – have to simply key in something like *67# — or any other number a telco provides – to ’talk’ to her bank.