The Central Bank of Nigeria (CBN) and the Nigerian Communications (NCC) have ordered banks to pay N250 billion debt owed to telecommunication operators as Unstructured Supplementary Service Data (USSD) charges.
This is despite a 150.18 percent decline in USSD usage for financial transactions as users move to Internet banking. According to the CBN, the total transaction value with USSD was N2.19 trillion between January and June 2024, a decline of 54.75 percent from N4.84 trillion in the same period of 2023. The volume of transactions fell by 150.18 percent to 252.06 million from 630.6 million.
In a December 20 memo, the CBN and NCC gave banks a deadline of July 2, 2025, for all payments after years of non-payments and disconnection threats by telcos. Banks have argued against USSD fees since a 2021 regulatory mandate, stating that charges are unfair and that the technology, which many banks initially rode on, was outdated.
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During the 20th anniversary of the telecoms sector in 2021, the then Group Managing Director of Zenith Bank Plc, Mr Ebenezer Onyeagwu, said, “The introduction of USSD changed everything. Without telecoms infrastructure, there is no USSD code.”
However, this sentiment is not shared by many bank executives. Segun Agbaje, CEO of GTCO, recently stated, “If you want to charge N20 for the service, go ahead. But collect it yourself. Don’t come to us.”
According to industry sources, the non-payment of this debt, which telcos peg at N2250 billion, has led to an investment slowdown in USSD infrastructure. The December 20 memo seeks to clean up the protracted USSD mess and enforce payment timelines.
Under the new rules, banks must pay 85 percent of all outstanding invoices (from February 2022) by December 31, 2024, and 85 percent of new invoices must be cleared within one month of receipt. By January 2, 2025, banks and telecom operators must agree on a payment plan to settle 60 percent of all outstanding invoices (before February 2022), and payment must be made before July 2, 2025.
Also, telcos cannot bill for USSD usage that lasts for less than 10 seconds. The CBN and NCC noted that failure to comply with the directive will lead to sanctions, including fines, operational restrictions, or other regulatory actions designed to enforce compliance.