Customers of Nigerian banks may be unable to use the unstructured supplementary service data (USSD) service to make transactions if the banks fail to settle the accumulated debts owed to the telecommunication service providers.
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has disclosed that the accumulated debt owed by banks for USSD rose to N80 billion as of November this year.
The chairman of ATCON, Gbenga Adebayo, disclosed this in a recent interview with Thisday.
Adebayo explained that the issue must be addressed sooner rather than later and threatened that a time would soon come when telecommunication companies would be forced to withdraw the services as banks refused to pay.
“When we started the argument in 2019, it was N32 billion, and they continue to claim that they are not owing. However, our investigation shows that they still use the USSD platform to offer banking services to their customers. Yet, they are not remitting to telecom operators who own the USSD platform.”
“Time will soon come when we will be constrained to withdraw the service and many bank customers that depend on the USSD service will suffer for it and it will affect the economy. It is hounorable to pay their debts and they have to pay,” Adebayo said.
The ATCON chairman also explained that the refusal of the banks to pay the telcos will endanger the goal to establish a cashless society. He implored the Central Bank of Nigeria to implore the banks to pay their debts.
“We are warning that the banks’ action in refusing to pay their debt, will have negative consequence on the CBN’s cashless economy agenda for the country. It will be a threat to cashless economy. So, CBN should advise money deposit banks to pay up the accumulated debts.”
Banks and telcos have disagreed over USSD fees since 2019
USSD service has helped more than 40 million customers of Nigerian banks access their accounts without needing an ATM or a mobile application. Transfers, airtime recharge, and many other processes are completed with a few taps on their mobile devices.
USSD services are used mainly by people with feature phones, especially those living in underserved areas with limited access to banks or banking agents. More people started using USSD because it was free at the time. In fact, USSD transactions grew by 80% to 762 million in 2020.
However, telecommunications operators said they could no longer provide the services for free in 2019. They proposed to take a cut of N4.50k per 20 seconds from the charges paid by customers to the banks.
However, the banks kicked against it, alleging that it would raise costs by 450 per cent.
On March 12, 2021, telecom operators said they would suspend the USSD service over N42 billion accumulated debt by banks — a move halted by Isa Pantami, minister of communications and digital economy.
Dr Isa Ibrahim Pantami wrote to CBN Governor, Mr Godwin Emefiele, highlighting the impending danger of the disagreement and stressing the need for banks to pay the accumulated debt or risk suspension of the USSD code.
In a meeting headed by the minister on March 16, 2021, mobile network operators (MNOs) and deposit money banks (DMBs) agreed to reduce the charge on customers to N6.98 for each USSD transaction.
Perhaps it will take the involvement of regulators such as the minister and the Central Bank of Nigeria to reach a resolution. But all stakeholders must settle and keep the USSD service available to customers.