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Telcos To Halt USSD Service Over ₦42Bn Banks’ Debt

Published

4 years ago

Mar 12, 2021.

USSD: Telcos To Block Millions From Mobile Banking Over Banks' Debt

Stakeholders and bank accounts holders who rely on unstructured supplementary service data (USSD) to perform financial transactions might be in for a tough time as telecommunications companies move to suspend the service.

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) announced the development in a statement on Thursday. .

In the statement jointly signed by Gbenga Adebayo and Gbolahan Awonuga, its chairman and head of operations respectively, , ALTON cited a N42 billion debt owed by financial institutions for its decision.

ALTON said it had a agreement with financial service providers on bearing the cost of USSD access by end-users but the arrangement could not continue following the issuance of the USSD pricing determination by the Nigerian Communications Commission (NCC).

“The banks decided that they would no longer pay for USSD service delivered to their customers and requested our members to charge customers directly for use of the USSD channel,” the statement read.

“This billing methodology where the customer is directly charged USSD access fees by our members irrespective of the service charges that the bank may subsequently apply to the customers’ bank account is called ‘End-User Billing’ which the banks specifically demanded that all our members implement.

“The banks, however, provided no assurances to our members that such service fees charged to customers’ bank accounts for access to bank services through the USSD channel would be discontinued post implementation of end-user billing by our members.”

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ALTON disclosed that it’s been eight months since the NCC issued an updated pricing for USSD which restricted telcos from charging end-users for the service and mandated banks to negotiate the settlement of outstanding obligations.

Both parties were also to agree individual pricing mechanisms to be applied on USSD services.

ALTON claims that telcos continued to provide access to USSD infrastructure despite the N42 billion debt owed by the banks.

“Unfortunately, as it has been impossible to agree on a structure for these payments with the banks that do not involve the end-user being asked to pay,” the association said.

“We deeply regret that we have reached a point where the withdrawal of these services has become unavoidable.”

ALTON said it would withdraw USSD services in phases starting with the most significant debtors on Monday, March 15.