USSD's Sunset? The Rise of Payment Gateways

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It's the dead of night, and you urgently need to make an important call. Panic sets in as you realize your account balance is running low, and you don't have a physical top-up card or access to a shop. In this moment of desperation,? using USSD code(*805#/*705#)? becomes your lifeline.

With just a few taps on your keypad, you can activate your mobile network's credit service and instantly replenish your balance or use your bank's code for a quick top-up. This convenience has transformed these codes into daily heroes for countless Ethiopians, especially in rural areas with limited internet connectivity. Moreover, this service has bridged the gap to financial inclusion, providing essential services like banking, bill payments, and airtime purchases to those without smartphones or reliable internet access.

With over 30 banks offering their unique USSD codes, This convenient service integrated? into a daily hero for countless users across Ethiopia, even without needing an internet connection. And? served as a bridge to financial inclusion, especially for those without smartphones or reliable internet access.

As digital payment solutions continue to evolve, USSD faces challenges that may limit its long-term viability. While it has served as a valuable tool for many, its limitations are becoming increasingly apparent:

• Network Dependence: These services rely on GSM networks, which can be unreliable in certain regions, leading to disruptions and user frustration.
• Higher Costs: Transaction costs can be higher than other digital payment methods, discouraging frequent use.
• Limited Functionality: USSD codes lack the advanced features offered by modern payment gateways, such as real-time transactions and enhanced security.
• Transaction Value Limits: Current transaction limits can hinder person-to-merchant interactions.

The Fate of USSD: A Transition to Payment Gateways

With technological advances, the future of USSD may be at a crossroads. While it has served as a vital tool for financial transactions,. Payment gateways offer enhanced functionalities—such as real-time transactions, richer user interfaces, and better security features—that USSD cannot match. As more people gain access to smartphones and stable internet connections, there's a growing expectation for more sophisticated payment solutions.

Furthermore, as Ethiopia aims for greater financial inclusion and a more robust digital economy, the transition to more sophisticated payment processing solutions is not only necessary but inevitable.

Payment gateways offer a superior user experience by:

• Integrating with mobile wallets for faster, more secure transactions.
• Providing intuitive user interfaces that cater to all digital literacy levels.
• Implementing robust security protocols like two-factor authentication and biometric verification.
• Supporting a wider range of services such as bill payments, remittances, and microloans.
• Fostering interoperability among various financial service providers.

These features make payment gateways a more attractive option for modern users seeking convenience, security, and a comprehensive financial ecosystem.

As digital payment solutions continue to innovate, USSD faces stiff competition from mobile apps and other technologies that offer richer features and a better user experience. As a result, its future seems limited to functions like checking balances and topping up airtime. Its popularity is overshadowed by smartphone apps and SMS. Most consumers prefer more modern, app-based solutions for mobile banking and transactions, making USSD less common. However, it remains relevant in specific contexts, such as for users of feature phones or for emergency services