USSD: Small business owners cry out ahead disconnection

Artisans and small-scale business owners across Nigeria have urged the federal government to prevent their businesses from being crippled by telecom operators’ move to disconnect some banks from accessing the USSD codes.

Barring any last-minute settlement, telecom operators in the country will disconnect some banks’ customers from accessing the Unstructured Supplementary Service Data (USSD) platform because of a N250 billion debt the financial institutions are owing the operators.

Millions of bank customers, especially those with small businesses, use online banking transactions that depend on the USSD platform to function.

Already, the Nigerian Communications Commission (NCC) has granted approval to telcos to disconnect the USSD codes of nine commercial banks from their networks.

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This follows years of complaints by the telcos over the non-payment of accumulated debt owed by the banks for the USSD service, for which the banks continue to charge their customers.

According to a notice issued by NCC on Wednesday, the debtor banks to be disconnected by January 27, barring debt settlement, are First City Monument Bank (FCMB), Zenith Bank, Sterling Bank, Jaiz Bank, UBA, Polaris Bank, Unity Bank, Fidelity Bank, and Wema Bank.

If the disconnection is eventually carried out, millions of bank customers will be blocked from using the USSD to transfer money.

“In fulfillment of its consumer protection mandate, the commission wishes to inform consumers that they may be unable to access the USSD platform of the affected financial institutions from January 27, 2025,” NCC said in the notice signed by its Director of Public Affairs, Reuben Mouka.

But Nigerians, especially small business owners and artisans, have said disconnection of USSD would cripple their businesses.

In Jos, Auwal Ibrahim, a phone repairer, said, “If we are disconnected from using USSD codes, it means they don’t want us to keep our money in the bank. Usually, if I repair a phone for my customers, they use the code to pay me if they don’t have cash. Similarly, if I don’t have cash, I use the code to transact business.

“If, at the end, we are disconnected from using the code, it means we cannot access our money. We’re happy that we’ve stopped going to the banks, which means reduced stress, but this issue is resurfacing. That’s not good for us. This will negatively affect business transactions, especially for people like us.”

Fatima Nasir, a fish seller, also expressed worry over the development. “Not everyone owns a smartphone. If the USSD codes are disconnected, we can’t transact business. Customers use the code to transfer money to us because that’s the only means they use to send money, and it’s the simplest way of transacting, particularly for petty businesses like ours,” she said.

In Kaduna, Adamu Hassan, a security guard, said the disconnection of USSD code transfers would greatly affect him because it is an easier way for him to send money to his family.

He said the disconnection would be unfair to customers who rely on the service for transactions and transfers.

“This measure will affect me in particular because I use USSD codes to send money to my family in Zaria. So, the disconnection is not the best option as far as I’m concerned. But that is not to say the affected banks shouldn’t be punished for their offence,” he said.

Another resident, a mechanic, Zakari Suwidi, said the disconnection would not affect him personally.

“I’m in support of the punishment against the banks because I don’t use their USSD services. I prefer using apps directly,” he said.

He also urged the NCC to call on banks to take measures in reducing unnecessary charges on transfers.

In Bauchi, some bank customers with accounts in the affected banks said the disconnection would cripple their businesses.

Alhaji Sanusi Ahmed said he operates a restaurant and POS machine and the majority of his customers transfer money into his account, even when there is no network, using USSD code.  But if the USSD code is disconnected, he said, he has no choice but to stop the business.

In Ilorin, a customer of one of the affected banks in IIọrin, Mr Sikiru Rafiu, a tailor, said the disconnection, if effected, would be a disaster to his business.

“I have customers across Nigeria and abroad that prefer my services that wire me money. Such disconnection would cripple my business. Customers who depend on online banking now are more than those that still use physical cash. It is even scary for me to imagine such a scenario.”

Another resident, Miss Zainab Abdullahi, said, “As an artisan, deactivation of USSD service by the NCC will greatly affect my day-to-day transaction with my customers, owing to the fact that there is low circulation of cash in the federation and the convenience and security advantages that come with going cashless.

“A lot of people have opted for cashless transactions. This can hinder customers’ payments for the business transactions made, thereby increasing debts and the overall income of my business.”

A cobbler, AbdulAzeez Olalekan, said such a situation may even result in security breach of one’s account without knowing.

“For instance, I don’t have an ATM card and I only receive alerts. Now, if such a service is affected, coupled with the fact that it might also affect our bank apps, how do we go about it? Some dubious persons can even try to exploit the situation to commit fraud.”

Also in Kano, artisans and other low-income earners said the planned disconnection of the banks would impact their  businesses negatively.

Kabiru Bello, a painter who maintains accounts with Zenith, Jaiz and Access banks, said he is not using a smart phone and therefore cannot have bank apps, noting that the disconnection will cripple his business.

“Honestly this would affect people like me. I am using this small phone to send money and if they are disconnected then it means I cannot transfer or buy a recharge card using my phone.”

Haruna Abdullahi, a tailor, said his bank is among those listed among those to be disconnected. He said the development is sad news to him because he makes and receives payment using USSD service with his FCMB account.

“It then means I must have an ATM card or go to the bank to make payment or withdrawal. It is another burden that would affect my business. What if my customer has no payment app? What if I need to buy something urgently? I pray they resolve this issue quickly otherwise my business may be crippled,” the tailor said.

Another resident Bilkisu Hassan Sufi who is a salary earner said she is saddened by the news because she uses the USSD service for quick transfer of money not above ₦10,000 which requires no internet or smart phone.

She said most low-income earners rely on USSD to transact one business or the other and disconnecting 9 banks would have a profound impact on their livelihoods.

Operators speak, insist on disconnection

The Association of Licensed Telecoms Operators of Nigeria (ALTON)’s Head of Operations, Gbolahan Awonuga, said, “If the banks fail to honour this ultimatum, the disconnection begins in earnest.”

He said the operators have the support of the Nigerian Communications Commission (NCC) and the Ministry of Communications and Digital Economy to disconnect the banks.

Disagreement over billing caused huge debt – Top bank official

One of the banks’ officials who pleaded anonymity said the debt ballooned because of disagreement over how to bill the user of USSD.

The official said: “USSD fees are charged by banks 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 banks’ collection platform and thus not billed to bank customers, telcos expect the banks to charge customers once the short-code is dialed, whether or not a financial transaction is consummated. This is the cause of the issue between us and the telcos.”

Customers should sue banks – NATCOMS

Speaking with Daily Trust President of National Association of Telecommunications Consumers of Nigeria (NATCOMS), Chief Deolu Ogunbanjo, said: “USSD is a critical channel leveraged primarily by the financially excluded,  vulnerable and critical mass. The CBN and the NCC should ensure 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.”

But Ogunbanjo said Nigerian telecom subscribers should sue the banks if they couldn’t use the USSD for their banking transactions by January ending.

He said the telcos are right if they eventually disconnect the banks by January ending.

He however advised them to use other effective ways to fight the banks to avoid causing hardship to the customers.

In 2020, the federal government’s drive to get more than half of Nigeria’s population to have bank accounts or at least contribute to financial flow through mobile banking was threatened by the disagreement between banks and telecommunications companies over Unstructured Supplementary Service Debt (USSD) debt.

Telecom operators, in March of 2021, announced that they would stop the use of Unstructured Supplementary Service Data (USSD) by banks and other financial institutions in the country.

Similarly, in May 2023, with debt now at N120bn, the operators again threatened to disconnect the banks from their USSD, but the Central Bank of Nigeria (CBN) quickly intervened.