By Annette Kiconco
In November 2023, Tech Cabal, a leading ICT news platform, published a story with the headline: “USSD remains Africa’s most popular payment channel despite growing alternatives.”
The article noted that while apps and QR codes are gaining traction, Unstructured Supplementary Service Data (USSD) remains the preferred payment channel across banking and mobile money services. By June 2023, USSD accounted for 70% of instant payment transactions, underscoring its central role in Africa’s digital and financial ecosystem.
The enduring strength of USSD lies in its accessibility. Unlike app-based solutions that require smartphones and reliable internet, USSD works on basic feature phones, which are still widely used across the continent.
According to the Financial Sector Deepening Uganda (FSD Uganda), over 80% of Ugandans own a mobile phone, with a large share relying on feature phones rather than smartphones.
For rural and low-income communities, USSD remains a lifeline, providing access to financial services without the need for advanced devices or expensive data.
The simplicity of the technology is what makes it so powerful. With a quick dial of a short code such as *240#, dfcu Bank customers can check balances, transfer funds, pay bills, or even access micro-loans in seconds.
This real-time, menu-driven interface requires no data connection, making it ideal for areas with limited network infrastructure. Uganda’s telecommunications sector reflects this reality: the Uganda Communications Commission (UCC) reports mobile penetration nearing 88% with over 43.2 million active subscriptions as of early 2025.
In contrast, internet penetration, though steadily growing, stands at about 59%, with actual active usage estimated between 25% and 30%. USSD therefore bridges a critical digital gap, enabling secure financial transactions for millions who would otherwise be excluded.
Globally, USSD has been recognized as a driver of financial inclusion. A 2022 study published in the International Journal of Computer Science and Mobile Applications concluded that USSD facilitates 70% of instant payment transactions across Africa, empowering unbanked and underbanked populations to engage in cashless transactions.
In Uganda, its impact is tangible. USSD underpins both banking and mobile money services, connecting rural farmers, small business owners, and urban youth to the financial ecosystem. For example, dfcu Bank’s USSD platform provides instant loan access—an invaluable tool for small and medium enterprises (SMEs) in need of quick capital to seize opportunities.
By supporting interoperability between banks and mobile money platforms, USSD ensures seamless transactions across financial institutions. This is vital in a country where mobile money accounts far outnumber traditional bank accounts, with more than 40 million registered subscribers as of 2023 (FSD Uganda).
Despite its dominance, USSD is not without challenges. Regulatory discussions around potential taxation, as reported by the Daily Monitor in 2023, risk undermining its affordability for the very communities it seeks to serve.
At the same time, the rise of smartphone adoption and app-based solutions is prompting debate about the long-term relevance of USSD. Yet, as Mobulk Africa emphasizes, USSD’s affordability and compatibility with even the most basic networks ensure that it will remain indispensable, especially where 2G coverage is still the backbone of communication.
At dfcu Bank, we are mindful of these dynamics. While we continue to invest in modern digital channels, we remain committed to optimizing our *240# QuickBanking service to guarantee fast, secure, and cost-effective transactions. USSD’s resilience—working reliably even in areas with limited connectivity—makes it an irreplaceable tool in Uganda’s uneven telecommunications landscape.
Importantly, USSD’s role extends beyond financial transactions. As noted by Africa’s Talking, USSD technology also supports applications such as voter registration, healthcare access, and other essential services.
At dfcu Bank, we envision USSD as a foundation for hybrid solutions, integrating it with innovations such as agent banking to further expand access. For rural customers, this means the ability to deposit or withdraw cash through local agents while still leveraging USSD for digital transactions.
The numbers continue to speak volumes: 70% of instant payment channels in Africa rely on USSD (Tech Cabal, 2023). This is more than just widespread adoption—it reflects deep trust in a system that has become the first gateway to formal financial services for millions. For many Ugandans, USSD is not just a service but an introduction to savings, credit, and economic empowerment.
As we look ahead, dfcu Bank will continue to leverage the simplicity and universality of USSD to deliver impactful financial solutions. It is not just a tool for transactions, but a catalyst for inclusion—empowering millions to participate in the formal economy with ease, dignity, and efficiency.
Writer is Annette Kiconco, Chief Retail Banking Officer, dfcu Bank