N42bn debt: Reps ask telcos to halt planned suspension of USSD services

The House of Representatives on Tuesday urged telecommunication operators in the country to halt the planned withdrawal and suspension of Unstructured Supplementary Service Data (USSD) services to banks and other financial institutions.

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The Association of Licensed Telecommunications Operators of Nigeria had threatened to disconnect financial service providers from USSD from Monday, March 15, 2021 until the concerned institutions pay the over N42 billion debt they owe the telcos.

But the House, while adopting a motion of urgent public importance sponsored by Nicholas Ossai (PDP, Delta) at plenary, mandated the Committee on Telecommunications to liaise with telecommunications operators, Nigerian Communications Commission (NCC), Central Bank of Nigeria (CBN) and Nigerian banks and other financial institutions with a view to resolving the impasse and report back to the House within six weeks for further legislative action.

Moving the motion, Ossai noted that the CBN, in a bid to realise one of its statutory mandates of promoting monetary stability and a sound financial system in Nigeria, designed a cashless policy that would provide innovations, easy mobile payment, cost reduction and convenient financial services to millions of Nigerians living in urban and rural areas.

He said one of the innovations introduced is the USSD services which is used by Global System for Mobile Communication Technology to communicate with their service providers’ computers via text messages to check account balance or mobile airtime, generate bank statement or do fund transfer and data balance enquiries or to receive one-time passwords or pin codes.

The lawmaker further noted that the USSD service which is controlled by Mobile Network Operators is a critical infrastructure used to provide mobile financial services to banks and other financial institutions in cell phones at very low cost, without requiring access to the user’s SIM card.

Ossai said the USSD infrastructure service houses all the Nigeria telecommunications operators – MTN, Glo, Airtel & 9Mobile – and internet service providers.

He observed that the USSD made it possible for millions of Nigerians who do not have smartphones or data/internet connections to access banking and other financial services on a daily basis, especially during the COVID-19 movement restrictions.



Customers to pay N6.98k per transaction for USSD services

Effective March 16, 2021, Nigerian bank customers will pay N6.98k per transaction for Unstructured Supplementary Service Data (USSD) services, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) said after a joint meeting on Tuesday.

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The new fee replaces the current per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion.

USSD is a critical channel for delivering financial services, particularly for the underserved and/or financially excluded.

A joint statement signed by Osita Nwanisobi, acting director, corporate communications department of the CBN, and Ikechukwu Adinde, director, public affairs, NCC, said this approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.

Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions.

This resulted in the accumulation of outstanding fees for USSD services rendered, leading to potential service withdrawal by the MNOs.

The new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts. This is to promote transparency in administration.

Banks are not to impose additional charges on customers for use of the channel, the statement said.

A statement plan for outstanding payments incurred for USSD services, previously rendered by the MNOs, is being worked out by all parties in a bid to ensure that the matter is fully resolved.

The MNOs and the deposit money banks are to discuss and agree on the operational modalities for the implementation of the new USSD pricing framework, including sharing of Application Programme Interface (API) to enable seamless, direct and transparent customer billing.

“Banks and MNOs are committed to engaging further on strategies to lower cost and enhance access to financial services. With the above resolutions, the impending suspension of banks from the USSD channel is hereby vacated. Therefore, banks shall no longer be disconnected from the USSD channel,” the statement said.