USSD: You May Soon Face Another Internet Banking Transaction Nightmare 

The ugly experiences of the recent cash swap policy by the Central Bank of Nigeria (CBN) may make another comeback soon.

This is as telecommunication firms have issued Deposit Money Banks disconnection notice amid a disagreement over Unstructured Supplementary Service Data service debt running to over N120bn.

According to the telcos, banks are owing them N120bn for using their USSD infrastructure for financial services.

Consequently, the telcos namely MTN, Glo, Airtel, and 9mobile, have concluded plans while stating their firm intention to disconnect bank customers from accessing bank services through USSD short codes. 

The notice of disconnection came after the Nigerian Communications Commission (NCC) granted telcos the approval to disconnect the banks after efforts of stakeholders, led by the former Minister of Communication and Digital Economy, Isa Pantami, the NCC, the Central Bank of Nigeria, and MNOs and DMBs, failed to yield results.

The telcos said, “It is pertinent to note that the contract between MNOs and DMBs on the use of USSDs for banking transactions is strictly commercial and MNOs are at liberty to withdraw the services if it is established that the transaction is unprofitable to them.”

According to the Chairman, of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, serving the banks’ notices is part of the withdrawal process.

“We have not disconnected yet, but notices have been given to the banks.

“The duration of this notice is dependent on the terms of the agreement with the operators.

"Disconnection is a function of if they respond with payment.

"If they respond with payment, we won’t see disconnections. If they don’t, we would start disconnections over the next days or weeks or months.”

Since 2019, banks and telcos have been at loggerheads over who should pay for USSD services.

As of 2019, telcos stated that banks were owing them N32bn for using USSD to offer financial services.

Since then, threats have been made, and on one occasion the Federal Government had to step in after telcos disconnected banks’ USSD access.

USSD remains the primary financial infrastructure for many Nigerians, especially those without smartphones (according to Alliance for Affordable Internet, only about forty-four per cent of Nigerians have access to smartphones).

According to the CBN Governor, Godwin Emefiele, people will suffer if banks and telcos do not reach an amicable solution soon.

Speaking during the recent launch of SabiMoni, he said, “I am very certain that we are going to get to the end of it because if we do not resolve the problem, the people who will suffer when this kind of disagreement goes on will be those who are the users of the banking sector.”