In an era of AI and blockchain, the simple text message seems distinctly old-fashioned. But text messaging’s USSD technology remains a key feature for African businesses. Here’s how a crackdown on customer information sharing suddenly makes USSD even more attractive.
By Seth Onyango
African businesses are continuing to find value in a technology that is largely being forgotten by the latest offerings of the metaverse, artificial intelligence (AI) and blockchain technologies.
Despite a whirlwind of digital advancement, including a surge in smartphone penetration across the continent and the emergence of world-leading mobile money solutions, Africa remains a huge market for feature phones, which offer text-based communications and are not reliant on an internet connection. Consequently, “old-school” USSD or Unstructured Supplementary Service Data (known by most of us as text messaging services) have remained a cornerstone for many African companies’ sales and services offerings.
Now, as the world pushes back on the harvesting of personalised information for market purposes, specifically through the use of “cookies” (small blocks of data that harvest information like personal details) these USSD-based services are looking more attractive again.
Google has already announced it will phase out all third-party cookies by 2024, while Apple has already blocked many cookies through its third-party tracking prevention system. With a global crackdown looming, USSD is being touted as a practical alternative for direct customer communication. This protocol is already firmly entrenched in Africa.
“This structure puts Africa in an enviable position to scale the impending disruptive events on the horizon,” Ayodeji Balogun, Co-Founder and Chief Technology Officer of Terragon, a data and analytics tech startup based in Nigeria, told Euronews.
“Advertisers in Africa are able to effectively cut through the marketing clutter and reach consumers directly on their mobile by leveraging the use of non-web telecommunications services such as SMS and USSD, which have remained popular.”
Nearly all banks have adopted the platform in Kenya, where USSD is also widely used. “USSD loans”, credits one can acquire from a loan service using a USSD code, are gaining traction.
According to a Tech Cabal report dated April 19, 2022, nine out of 10 mobile transactions in sub-Saharan Africa flow through USSD. Already, customers in Africa continue to check their mobile money and bank account balances, transfer funds, and pay bills from the comfort of their homes using USSD.
The internet-independent platform, compatible with all mobile devices, also allows advertisers and firms to deliver personalized messages to a demographic otherwise hard to reach.
The service is particularly beneficial in underserved regions, narrowing the digital divide and fostering financial inclusion.
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