Monday, May 20, 2013

Mobile banking on USSD likely to get delayed

May 20, 2013:--

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KOLKATA: Full-scale mobile banking services over the Unstructured Supplementary Service Data (USSD) platform, a text message-based interactive backbone could hit a roadblock with both GSM and CDMA operators at loggerheads with the National Payments Corporation of India (NPCI) on the revenue-sharing model.

Mobile phone companies have spurned NPCI\'s offer of a \"paltry 25 paise per transaction\" and instead want to adopt a B2B-based billing model by directly negotiating with the banks. The revenue-sharing model proposed by NPCI is based on a projection of roughly 9.3 million mobile banking transactions a month.

\"NPCI\'s revenue-share proposal is a pittance and totally unacceptable. Since mobile subscribers will be paying to access their bank accounts , both GSM and CDMA operators plan to discuss commercials with the banks directly instead of going through an intermediary such as NPCI,\" said Rajan Mathews, Director General of the Cellular Operators Association of India (COAI), the industry body representing GSM operators like Bharti Airtel, Vodafone and Idea Cellular amongst others.

In a joint communique to NPCI, the COAI and AUSPI, the industry body representing CDMA operators like Reliance Communications, Tata Teleservices and Sistema Shyam have dismissed NPCI\'s revenue share proposal of 25 paise per transaction claiming \"it was not even mentioned during a recent meeting on the issue chaired by Trai\", adding that the sector regulator was, in fact, \"open to direct negotiations between telcos and banks\".

The joint letter, dated May 16, was shot off by the mobile industry lobbies in response to a recent NPCI proposal to ink service level agreements (SLAs) with all participating telcos planning to offer mobile banking services instead of allowing them to directly negotiate commercials with banks.

NPCI, however, is firm on implementing mobile banking over the USSD platform, which is a menu-based system that enables mobile customers to access content-based services. The USSD menu acts as a browser to pull content to the cellphone without requiring an internet or GPRS connection. USSD is typically used by prepaid subscribers to check their balance.

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