Mobile network providers to suspend USSD banking on March 15

THE Association of Licensed Telecommunication Operators of Nigeria (ALTON) has threatened to withdraw Unstructured Supplementary Service Data (USSD) services to financial service providers (FSPs) starting from March 15.

ALTON made this known on Friday in a statement signed by its chairman, Gbenga Adebayo, and head of operations, Gbolahan Awonuga.

The association said with the agreement of the minister of communications and digital economy and the Nigerian Communications Commission (NCC), the mobile network operators would disconnect FSPs from USSD services until their huge debt was paid.

ALTON noted that its members were initiating a phased process of withdrawal of USSD services, starting with the most significant debtors within the FSPs, effective March 15.

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It said that members had continued to provide USSD services because their primary concern was to ensure that millions of Nigerian customers accessed financial services through USSD infrastructure every day.

“Unfortunately, due to huge indebtedness and the possibility to agree on a structure for these payments without asking end-users to pay, the government has been forced to intervene.

“The government intervened to ensure that a sustainable cost-sharing solution is agreed on so that consumers do not get affected in the long-term,” the statement read in part.

ALTON also stated that its members deeply regretted reaching a point where the withdrawal of these services had become unavoidable, adding that they would remain committed to working closely with the relevant ministries and regulators to resolve the issue as quickly as possible to minimise disruption to customers.

    According to reports, the NCC did not charge banks for using USSD to provide financial services due to the benefit of boosting digital financial inclusion in Nigeria.

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    However, in January, NCC released a directive stipulating the issuance of licenses to banks and other institutions for the USSD services.

    In the directive, for banks to provide USSD services to their customers, it would attract 10 million naira as an allocation fee, while the renewal fee was fixed at 10 million naira. For non-core financial institutions, it would be 6 million naira allocation fee and 6 million naira renewal fee. Microfinance banks would pay 500,000 naira for allocation and 500,000 for renewal.

    Umar Garba Danbatta, executive vice chairman of the Nigerian Communications Commission (NCC), had said commercial banks in the country owed telecommunications companies over 17 billion naira following the regulator’s suspension of its Determination on Unstructured Supplementary Service Data (USSD) Pricing in 2020.

    Lukman Abolade is an Investigative reporter with The ICIR. Reach out to him via [email protected], on twitter @AboladeLAA and FB @Correction94

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