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USSD not outdated and vital to any omnichannel strategy in Africa says Clickatell

Unstructured Supplementary Service Data or USSD is not an outdated technology and critical to omnichannel-focused digital transformation strategies.

This is according to management at Clickatell, a front-runner in mobile communications and chat commerce.

The company says as companies forge ahead with their digital transformation, many are inadvertently excluding large parts of their customer base who don’t own smartphones, alienating vital demographics and crippling their digital inclusion agendas.

Even though it is over two decades old, the technology cannot and should not be overlooked says Clickatell.

Jeppe Dorff, Clickatell Chief Product and Technology Officer.
Jeppe Dorff, Clickatell Chief Product and Technology Officer.

“Far too often we see companies, in select markets, inadvertently, omit large parts of their customer base by overlooking USSD as a service from their channel offering,” says Jeppe Dorff, Clickatell Chief Product and Technology Officer.

“USSD is an incredible technology that has helped banks service customers across the African continent for more than a decade. South African institutions in particular have been successfully using USSD technology for more than twenty years. It is familiar to every age group in every LSM (Living Standards Measure), whether they are using a smartphone or a feature phone. It is the most ubiquitous mobile technology in South Africa and should be a cornerstone of any customer offering,” he adds.

USSD is a communications protocol controlled by mobile network operators and supported by 99% of GSM handsets. It is used to provide services from mobile phones at a low cost, and without requiring access to the user's SIM card.

According to Clickatell, despite the rising popularity and growing affordability of smartphones, IDC research still shows 56% of phones shipped to South Africa in the third quarter last year were feature phones, making the USSD channel absolutely vital to any channel strategy.

“What’s more, USSD has been responsible for a significant amount of the gains made in financial inclusion, especially in Africa. The GSMA reports that more than 90% of mobile money transactions in Africa in 2018 were completed using USSD,” the company states.

Despite the technology’s efficacy, Dorff says many companies, especially in the enterprise space, are still overlooking this obvious channel to serve the lower income demographics.

“Our own business experience has shown us just how effective USSD is. In 2020, our existing USSD customers in only two countries accumulated a staggering 3 billion USSD sessions through our platforms and helped facilitate around 400 million end-to-end conversations between brands and their end users,” Dorff shares.

Dorff says that while many organisations are focussed on delivering smart technologies like AI and natural language processing, including traditional technologies like USSD broadens an organisation's reach and makes excellent business sense.

“USSD is a cost effective and scalable enterprise solution that quickly allows your users to connect, interact, and transact with your businesses. It should be seen as an effective revenue driver, enabling you to both sell goods and support customers with quick and easy self-service options. USSD requires no internet access and is not a drain on your customer’s precious, and often expensive data. There are no downsides to including USSD in your offering. By neglecting to do so, however, you are not only lowering customer satisfaction, but you are excluding valuable customers from your digital offering and leaving money on the table,” Dorff cautions.

Chat commerce

Clickatell co-founder and CEO Pieter de Villiers.
Clickatell co-founder and CEO Pieter de Villiers.

In October 2020, Pieter de Villiers, co-founder and CEO at Clickatell, reiterated that the next billion people and millions of merchants will not be on-boarded through websites, email, and point of sale devices. Rather, it will be through chat commerce experiences (where people engage and transact with businesses on the chat channels they already have on their mobiles) with the growth of the chat economy presenting one of the most fertile commercial opportunities of the 21st century.

According to the company, research shows that consumers spend 90% of their screen time on five mobile apps – and chat apps rank number one. It also points to new Aberdeen research which shows that companies using chat capabilities enjoy 75% greater Y-o-Y growth and 89% greater annual growth in cross-sell and up-sell revenue.

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