Understanding USSD as a payment option

Recently at a conference, a man sitting in the audience heard the speaker mention “USSD” as a payment option. Immediately he turned to another man sitting to his right and asked “USSD? Is that a new currency?” the seatmate replied “I think it’s a new minting machine they are bringing into the country.”

We live in a fast paced world. Where while we are about to familiarize ourselves with one new development, another one is already taking its place. We have to consciously keep up with the avalanche of new information in order to understand how it benefits our personal well-being.

The USSD is an abbreviation for Unstructured Supplementary Service Data. It is a technology that transmits information through GSM network channels – these channels are normally used for voice calls via your phone.

The USSD technology, according to an expert, facilitates sessions of communication that can be used in various areas of life including banking. It requires some form of partnership or agreement between your telecom operator and bank. Their communication takes place via USSD.

USSD is similar to Short Messaging Service (SMS), but, unlike SMS, USSD transactions occur during the session only. The service is available on every phone where an SMS can be sent including smartphones and tablets.

It is the code that you enter on your phone to enable you make certain banking transactions like money transfers, balance checking, phone recharge etc. Ordinarily, these are services that you would have had to go to a physical bank in order to complete but with USSD, going to a bank is no longer necessary.

A USSD code does not necessarily require you have internet connection. There are variations of it. In Nigeria, the most popular USSD code appears to be the GTB *737*.

The USSD can be used for money transfer. The limit one can send using the GTB code is N200, 000. You can send money to family members, friends and clients etc. Users also enjoy stressless airtime top-up using designated USSD codes. For instance, to buy airtime from an account with First Bank, a client will simply enter *894# on any type of phone. Some banks’ USSD code allows customers to do interbank transfer, an instance is- Fidelity Bank customers can transfer their money to another bank by dialling *770*Account number*Amount#.

However, customers should expect to be charged for every transaction they make with the USSD codes. Charges may vary. A transfer using GTB code may cost N20. You will be charged even if your transaction did not go through.

It is also important to note that once you send the transfer it is impossible to cancel a USSD transaction. Finally, you must also be registered for mobile banking to access the facility.