USSD debt: CBN moves to resolve issues with banks, telcos

Following moves by telecommunication companies in Nigeria to disconnect bank customers  from accessing online banking transactions that depend on the Unstructured Supplementary Service Data, USSD platform to function, The Central Bank governor has intervened to resolve the crisis.

The Nigerian Communications Commission, NCC, has given the telecom companies, telcos, in Nigeria the go-ahead to withdraw their USSD services to the banks, following growing debt, which has accumulated to over N120 billion.

As at the last two interventions by the NCC, CBN and Minister of Communications between 2020 and  2022 the debt profiles were between N42 billion and N80 billion

Speaking on the intervention, the Ag Director, corporate communication, Dr Abdulmumin Isa said the Apex Bank is very much aware of the protracted dispute between the banks and telcos and has been engaging all stakeholders to ensure an amicable resolution.

He said: ‘Indeed, it was due to the direct intervention of the CBN (or CBN Governor) in March 2021. that a per session price of N6.98 (including to settle any outstanding fees) was agreed upon between the banks and telcos. As far as we are aware, since 2021, DMBs continue to collect the USSD fees and remit the same on behalf of the telcos based on that agreement.

“We understand the latest dispute concerns technical issues regarding the definition of a successful transaction from a bank and telco perspective.

“USSD fees are charged by DMBs using an automated system which bills the customer for a successful transaction only after a banking service is consumed. For the Telcos, a successful transaction happens once the customer has dialled the USSD short-code which may not lead to the consummation of a banking service. Whilst Such truncated transactions are not registered on the DMBs collection platform and thus not billed to bank customers, telcos expect the DMBs to charge customers once the short-code is dialed, whether or not a financial transaction is consummated.”

Dr Isa explained that at a recent meeting of the DMBs & Telco’s  representatives chaired by the CBN Governor  to resolve the issue, he acknowledged the telcos right to collect all legitimately earned fees due to them and to recover their cost.

He said; ‘Following discussion the direct billing model was proposed as a lasting solution to the issue. This would enable telcos full visibility of USSD transactions and allow them to charge their customers directly. The feasibility of the model is still being worked out by the relevant stakeholders.

“USSD is a critical channel leveraged on  primarily by the financially excluded,  vulnerable and critical mass. The CBN remains committed to ensuring that the areas of contention related to collection of telco charges for USSD are resolved in the interest of the financial system and overall economy.”