What USSD payments are, how Ncell's USSD menu worked, why it mattered for unbanked users, and where it stands today.
Before smartphone wallets reached everyone, Nepal’s mobile payments ran over a channel most people
never think about: USSD — the star-hash menus (*900#, *123#) that work on any GSM phone,
with no internet and no app. This is the story of that era: what it was, why it mattered more in
Kathmandu’s periphery than in its tech meetups, and what it left behind.
How a USSD payment actually worked
You dialed a short code. The network answered with a text menu. You replied with numbers — 1 for balance, 2 for top-up, 3 for transfer — stepping through screens that never took more than a few seconds and never needed a single byte of mobile data. A payment session might look like: dial, choose “send money”, enter the recipient’s number, enter the amount, enter your PIN, receive a confirmation SMS. Total time: under a minute, on a handset worth a thousand rupees, anywhere with a signal.
Under the hood, USSD is a session-based protocol on the operator’s signalling channel — the same plumbing that carries “you have 2 new voicemails”. Sessions are live conversations with the network, which is why they feel instant and why they time out if you linger.
Why it mattered here more than elsewhere
The obvious answer is smartphones: through most of the 2010s a large share of Nepali mobile users had feature phones, and data coverage outside city centres was patchy. But the deeper answer is banking. USSD payments didn’t require a bank account, a card, or literacy in app-store English. Students, migrant families receiving remittances, small traders — the technology met them on the cheapest handset in the market. In financial-inclusion terms, that is not a rounding error; that was the product.
For merchants, “pay via USSD” meant the addressable customer base was every mobile user on the network, not just app installers. For the operators, it built the payment habit that the wallet apps later harvested.
The limits were real too
No receipts beyond a confirmation SMS. Sessions that died if you took too long. Security that leaned heavily on the PIN and on user education — phishing by SMS was already a thing. And no rich interface: no product photos, no cart, no history beyond what the menu offered. USSD was a bridge, and everyone building on it knew it.
Where it stands now
Smartphone wallets and interoperable QR have absorbed most of the consumer volume — the smartphone share of the market made that inevitable. But USSD never left: operator self-service still runs on it, it remains the fallback when data fails, and every “offline payment” pilot in the market since has been, in essence, a redesign of the USSD idea — transactions that run on the dumbest available device.
From this domain’s history
This article’s 2020-era predecessor on the old podamibenepal.com was written when USSD payments were live infrastructure, not history — one of the pieces that made the domain’s archive worth preserving. It is republished here, rewritten and updated, as part of keeping that record useful.
FAQ
What is USSD?
Unstructured Supplementary Service Data — the star-hash menu system (*123#) that runs on any GSM phone without internet. It powers balance checks and, in many markets, simple payments and transfers.
Why did USSD payments matter in Nepal?
Because for years a large share of mobile users had no smartphone or data plan. USSD made payments, top-ups and balance checks possible on any handset — a genuine financial-inclusion tool, not a technical curiosity.
Is USSD still used today?
Yes, as network infrastructure — balance checks and operator services still run over it, and it remains the fallback layer when data or smartphones are absent. Consumer payment volume has largely moved to smartphone wallets and QR.