USSD is a communication technology used by mobile devices to interact with network services. Unlike SMS, which operates using a store-and-forward method, USSD establishes a real-time connection between the user and the service provider.
When someone dials a code like *123#, it opens an instant session where they can navigate menus, check balances, buy airtime, or perform transactions without needing internet access.
The simplicity and speed of USSD make it highly useful. Sessions are interactive, meaning a user receives a menu, makes a selection, and then receives another prompt in real time.
This interactive nature provides users with immediate feedback, ensuring they don’t have to wait for messages to be delivered, unlike with SMS.
Common applications of USSD in banking and telecom
USSD is widely used in various industries, particularly where internet connectivity is limited. Its most common applications include:
- Mobile banking: Checking account balances, transferring money, paying bills, and purchasing services. Many banks in developing countries rely on USSD to provide financial services to individuals who do not own smartphones.
- Telecom services: Buying airtime, subscribing to data plans, managing mobile accounts, and checking usage.
- Government services: Distributing welfare funds, verifying subsidies, and delivering financial support programs.
USSD does not need mobile data or internet; it is one of the most inclusive tools in financial and telecom services.
For millions of people in Africa and Asia who own only feature phones, USSD is their gateway to digital services.
Why security is essential in USSD transactions
Despite its importance, USSD is not without risks. A considerable amount of sensitive information, including PINs, bank details, and financial transactions, passes through USSD platforms every day.
If unauthorized parties gain access, the consequences can be devastating.
Risks include:
- Financial fraud: Attackers can move money or recharge their own phones using stolen USSD access.
- Identity theft: Personal data can be harvested and used to impersonate victims.
- System vulnerabilities: Without proper security, both users and service providers are left exposed to large-scale fraud.
For this reason, securing USSD channels is not just an option but a necessity.
Risks of unauthorized access to USSD
Hackers can intercept unprotected USSD communications and steal personal details. Information such as bank account numbers, PINs, and national ID numbers is valuable.
Once stolen, they may be used directly for fraud or sold on the dark web to criminal networks. Victims often find themselves facing identity theft issues that go beyond financial loss.
1. Financial fraud through mobile banking
USSD banking systems that rely only on weak PINs are at higher risk. Criminals who obtain these PINs through social engineering, phishing, or device theft can quickly siphon money from accounts.
Since transactions happen instantly, recovering funds after fraud can be extremely difficult.
2. SIM Swap and cloning attacks
A widespread method of exploiting USSD is SIM swapping. In this attack, fraudsters trick telecom staff into transferring a customer’s mobile number onto a new SIM card.
Once this happens, the attacker effectively becomes the victim, gaining access to calls, SMS, and USSD sessions.
SIM cloning, where data from one SIM is copied onto another, can also grant attackers control of a user’s mobile identity.
3. Malware and social engineering threats
Fraudsters often disguise malicious applications as banking tools. Users who unknowingly download these apps may expose their USSD codes and PINs.
Additionally, social engineering, where criminals trick people into disclosing confidential information, remains a powerful tool.
For example, a caller pretending to be from a bank’s support team may persuade someone to share their USSD PIN.
Preventive measures for protecting against unauthorized USSD access
Securing USSD requires a combination of technical safeguards, regulatory measures, and user education. Below are key measures:
1. Strong authentication mechanisms
- PIN and password best practices: Users should be encouraged to use strong USSD PINs (ideally 6 digits or more) that are not linked to birthdays, phone numbers, or repeated digits. Telecom operators should enforce limits on incorrect attempts, automatically blocking suspicious activity.
- Multi-factor authentication (MFA): Banks can enhance USSD access by implementing a second layer of verification. For example, after entering a PIN, a user may be required to confirm via OTP (one-time password) sent via SMS, or in advanced cases, through biometric authentication.
2. Secure SIM card management
- Avoiding SIM swaps: Telecom providers must enforce stricter identity verification before replacing SIM cards. Government-issued IDs, biometric verification, or in-person checks should be mandatory.
- Locking SIM with PIN codes: Users should set up a PIN for their SIM. This means even if someone steals the SIM, it cannot be used on another device without the PIN.
3. Encryption and secure channels
- End-to-end encryption for USSD sessions: Sensitive USSD sessions should be encrypted to prevent interception by malicious actors.
- Secure gateways in telecom infrastructure: Operators should deploy secure gateways, firewalls, and intrusion detection systems to block unauthorized access attempts.
4. Regular software and firmware updates
- Telecom operator updates: Telecoms must regularly update their infrastructure to close security loopholes.
- Mobile device patches: Users should also update their devices. Even feature phones receive occasional updates, and keeping them up to date helps reduce risks.
5. User awareness and education
- Recognizing Phishing and Fraudulent Messages: Customers should be taught to differentiate between legitimate messages and fraudulent attempts. For example, banks should educate clients that they will never ask for USSD PINs over the phone.
- Safe mobile banking practices: Users should only use official shortcodes published by their banks or telecom operators. Using unverified codes can expose them to fake or malicious platforms.
Best practices for telecom operators and banks
The best practices include:
- Network-level security protocols: Deploy firewalls, intrusion prevention systems, and real-time monitoring tools.
- Fraud detection and monitoring: Use AI-based systems to detect unusual patterns, such as multiple failed USSD attempts or abnormal transaction values.
- Regulatory compliance: Follow standards such as PCI DSS (Payment Card Industry Data Security Standard) and ISO/IEC 27001 to secure sensitive data.
Role of regulatory authorities in USSD security
Security cannot be left to operators and users alone. Regulatory bodies play a central role in setting standards.
- Global telecom security standards: Organizations like the GSMA and ITU provide global benchmarks for mobile security.
- Financial regulatory guidelines: Central banks often issue guidelines for USSD banking. For example, they may require banks to use two-factor authentication or limit transaction values.
- Regional compliance: Countries may enforce local data protection and cybersecurity laws, requiring both banks and telecom operators to secure user data.
Future of USSD security
While USSD remains useful, its future depends on stronger security models.
- Migration to mobile apps: Banks are increasingly encouraging customers to use mobile apps with stronger encryption. However, this must not exclude users with feature phones.
- Blockchain authentication: Distributed ledger technology could provide tamper-proof identity verification.
- AI-powered fraud detection: Machine learning systems can detect fraud in real time by spotting unusual transaction patterns before money is stolen.
Strengthening USSD security for a safer digital future
USSD is a lifeline for financial inclusion, particularly in regions where internet access is limited. But its widespread use also makes it a target for cybercriminals.
Protecting against unauthorized access requires a multi-layered approach:
- Users should adopt strong PIN practices and remain alert to fraud.
- Telecom operators should secure SIM replacement processes, implement encryption, and deploy advanced monitoring systems.
- Banks should integrate stronger authentication measures and educate their customers.
- Regulators should enforce strict compliance standards and continuously update guidelines as new threats emerge.
Ultimately, security in USSD is a shared responsibility. Telecoms, banks, regulators, and users must work together. If each stakeholder plays their role, USSD can remain a safe, reliable, and inclusive platform that continues to empower millions without exposing them to unnecessary risks.
