USSD the unsung hero of financial services in Kenya

Technology

USSD the unsung hero of financial services in Kenya


Summary

  • As smartphone adoption increases and mobile connectivity improves, more and more services are moving towards installable mobile apps.
  • The storage requirements for a full-fledged mobile app can cause a consumer to trade off a facility based on how they spend their device time.
  • USSD, a communication protocol accessible from most GSM phones, was early in mobile phone adoption, used only for simple services like airtime recharge.

The need for financial services has spurred innovation across the continent.

Over the past decade, the calls have been to bank the unbanked, a defensible position stemming from the different perspectives for and against the traditional institutional frameworks in which banks operate.

The desire to make, move, grow, consume and access money in its various states is common, transcending culture, currency and country.

The five monetary actions mentioned cannot exist or function in isolation. They are advantageous when widely adopted, when the volume increases and everyone is easily accessible.

The wave of digital transformation further inspires us to embrace inclusion and think about what this term means when creating user experiences and choosing a technology stack.

As smartphone adoption increases and mobile connectivity improves, more and more services are moving towards installable mobile apps. User experiences can be elegant and services feature-rich. But with everything, we have to consider primitives and the form and function they take. In this case, the primitive to which we apply the five actions is cash.

The storage requirements for a full-fledged mobile app can cause a consumer to trade off a facility based on how they spend their device time. For much of any addressable population in emerging markets, the need for connectivity, a non-issue for most readers, affects usage and the perception of services that need it to access it.

USSD, a communication protocol accessible from most GSM phones, was early in mobile phone adoption, used only for simple services like airtime recharge. It has since matured to bring the best in accessibility and cost.

Many banks and saccos now have USSD access which enables “offline” access to banking, savings and credit services for millions of consumers. Given this utility, we see mobile applications designed to take advantage of the server-side processing nature of USSD.

The result is lighter apps that work well for phone real estate and storage-conscious consumers. A big advantage is that USSD is session-based and does not require constant connectivity.

Hover, a tech startup, has created a software development kit that allows developers to attach USSD automation to Android apps. Stax, their showcase application is available in nine African countries and continues to grow. It shines in the presentation of possible UX.

They mapped hundreds of services in each market, from mobile network offerings, mobile money, banking, lending apps, billers to general utilities.

The killer use case I’m waiting to see is decentralized finance. USSD, combined with mobile money and open banking, can unlock transformative products and services across the continent.

Njihia is Head of Business and Partnerships at Sure Corporation | www.mbuguanjihia.com | @mbuguanjihia