The value of transactions made through the Unstructured Supplementary Service Data (USSD) route between January 1 and 18 was more than double the aggregate value transacted in the whole of December, according to data released by the Reserve Bank of India (RBI).
At R20.99 crore, the amount for the first 18 days of January was more than double of the R10.37 crore worth of transactions carried out through the USSD route in December. A total of 1.02 lakh USSD transactions were made between January 1 and 18, against 1,02,300 transactions made through the whole of December.
This was, in itself, an increase of 78% month-on-month. However, the difference in pace in the rise of the number of transactions and their aggregate value also pointed to a significant increase in the average ticket size of each transaction.
According to the data, the average ticket size for USSD transactions in the first 18 days of the month under review was R1,229, higher than R1,015 for December. One of the reasons for the surge in transactions was the sudden withdrawal of legal tender on currency notes of R500 and R1,000 on November 8. The recall of 86% of bank notes in circulation resulted in a cash crunch, which forced a number of people to make transactions using digital channels, including UPI.
The USSD channel is an SMS-driven payments service meant for those using basic cellphones, also known as feature phones, and lacking access to internet. Apart from carrying out financial transactions, USSD can also be used for availing of non-financial services, such as balance inquiry, mini-statement for the last five transactions, queries related to Aadhaar seeding and overdraft account.
Earlier this month, AP Hota, managing director and CEO of the National Payments Corporation of India, which administers USSD, had told FE that prior to demonetisation, a majority of USSD transactions were of non-financial nature. That has changed, with the balance tilting in favour of money transfers after November 8, he had said.
Since December 2, the central bank has been releasing data related to electronic payments on a daily basis, with a day’s lag.