Telecoms ministry secures USSD transactions

Financial Tribune- Minister of Communications and Information Technology Mohammad Javad Azari Jahromi said an agreement has been reached about what method should be employed to ensure bank card information safety using Unstructured Supplementary Service Data communications protocols.

“Based on an agreement between the Communications Regulatory Authority and the Central Bank of Iran, it was decreed that we use a new security mechanism to ensure the safety of this method [USSD] in transactions,” Jahromi added.

The method, also agreed upon by mobile network operators and payment service providers, is to install applets on SIM cards, the minister was quoted as saying by Mehr News website on Tuesday at the Third Internet of Things Conference and Exhibition.

CBI wanted to prohibit bank transactions conducted on the USSD platform because of its lack of safety, but its directive targeted to become operational from Feb. 4 was halted after Telecoms Ministry lobbied on behalf of mobile operators who stood to lose the most.

The intervention came because the initiative also included a measure saying card not present transactions aimed at purchasing phone recharges will be subject to end-to-end encryption, meaning that USSD would be sidelined and two major mobile operators MCI and MTN-Irancell that own 98% of the mobile phone market would lose a portion of their business.

The minister had earlier maintained that CBI’s initiative is essentially correct, as it aims to boost bank card information safety, but had reasoned that blocking USSD transactions now would reduce their ICT market share in addition to disadvantaging people.

Jahromi noted that if mobile operators fail to come up with a method to secure USSD transactions, he will also support CBI’s encrypted transactions.

“We are trying to realize the considerations of the central bank with regard to ensuring the safety of electronic payments. The new regulatory solution is currently being reviewed and executed,” the official said on Tuesday.