Customers of Nigerian banks may be unable to conduct transactions using the unstructured supplementary service data (USSD) service if the banks fail to settle the accrued debts owed to telecommunication service providers.
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) said that the aggregate debt owed by banks for USSD had reached N80 billion as of November 2022.
Gbenga Adebayo, the chairman of ATCON, stressed the urgency of finding a solution while threatening that telecommunications providers will soon be forced to stop providing their services as a result of banks’ refusal to pay.
“When we started the argument in 2019, it was N32 billion, and they continue to maintain that they are not owing.” Our analysis showed that they still employ USSD to provide financial services. However, they are not paying USSD platform owners.
“Time will soon come when we will be forced to withdraw the service, and many bank clients that depend on the USSD service will suffer, and it will impact the economy.” “It’s honorable to pay their debts,” Adebayo remarked.
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The ATCON chairman further outlined how the effort to create a paperless society would be jeopardized by the banks’ refusal to pay the telcos. He begged the Nigerian Central Bank to beg banks to pay their obligations.
“We warn that the banks’ refusal to pay their loan will harm the CBN’s cashless economy vision for the country. It threatens a cashless economy. Thus, CBN should instruct money deposit banks to repay debts.
Telcos and banks have argued over USSD costs since 2019
The USSD service has enabled more than 40 million Nigerian bank customers to access their accounts without ATMs or mobile applications. Transfers, recharging airtime, and several other tasks are accomplished with a few taps on their mobile devices.
Feature phone users, especially those in underserved areas without banks or banking agents, use USSD services. Free USSD usage increased. USSD transactions increased by 80% to 762 million in 2020.
The telecommunications companies stated they could no longer offer free services in 2019. Customers’ bank charges would be reduced by N4.50k every 20 seconds.
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The banks argued that it would increase costs by 450 percent.
Isa Pantami, minister of communications and digital economy, stopped telecom providers from suspending USSD service on March 12, 2021, with over N42 billion in bank debt.
Dr. Isa Ibrahim Pantami wrote to CBN Governor Mr. Godwin Emefiele about the disagreement and the necessity for banks to settle the loan or risk USSD code suspension.
Mobile network operators (MNOs) and deposit money banks (DMBs) agreed to charge N6.98 for each USSD transaction in a minister-led meeting on March 16, 2021.
To find a solution, it could be necessary to consult regulators like the minister and the Central Bank of Nigeria. However, a deal must be reached between all parties to maintain client access to the USSD service.