NIGERIA:Telcos Suspend Withdrawal of Banks’ USSD Services

The initial plan by telecoms operators (telcos) to suspend the Unstructured Supplementary Service Data (USSD) to banks and other Financial Service Providers (FSP), over accumulated debt of N42 billion, has been put on hold.

The decision followed the directive of the Minister of Communications and Digital Economy, Dr. Isa Pantami, who asked the telecoms operators to wait until the outcome of today’s meeting scheduled with the Governor of Central Bank (CBN), Mr. Godwin Emefiele, to discuss the lingering issues.

The telcos had threatened to suspend the bank’s USSD services from today and advised bank customers to use alternative channels for their financial transactions.

They accused the banks of reneging on the agreement to remit a certain amount of money to the telcos for using the USSD code to service their customers, adding that the amount accumulated over the years to reach N42 billion.

The USSD is a software code developed by telecoms operators, which allows bank customers to carry out financial transactions like money transfer, without internet data and internet connectivity.

Different banks that subscribed to the service use different codes for their customers.

For instance, one of the banks uses *737* to support the transfer of money from customers’ mobile devices without the use of internet data connectivity.

In order to address the impasse, Pantami, through his Technical Assistant on Information Technology, Dr. Femi Adeluyi, wrote to Mobile Network Operators (MNOs), directing them to stay action on the suspension plan, pending the outcome of a meeting he has arranged with Emefiele and industry stakeholders.

“The Minister of Communications and Digital Economy, Dr. Isa Ibrahim Pantami, has directed that the impending suspension of the USSD service by the Mobile Network Operators (MNOs) be put on hold. The suspension, which was to take effect on Monday, March 15, was due to lingering debt owed MNOs by commercial banks for the provision of USSD banking service,” a statement issued by Adeluyi said.

Part of the minister’s letter, dated March 13, 2021, to telecoms operators, read: “In a bid to ensure amicable resolution of the impasse, Pantami has called for a meeting of all stakeholders, including the Governor of the Central Bank of Nigeria (CBN), the Executive Vice Chairman of NCC, the MNOs and the financial institutions, scheduled to hold on Monday, March 15, 2021.

“The outcome of the meeting will determine the next steps regarding the status of USSD financial services.”

Chairman of Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, who confirmed the letter, said telecoms operators had decided to put the suspension plan on hold, pending the outcome of the meeting.

“We received a letter from the minister, asking us to put the suspension plan on hold, and we have agreed to do so, and wait for the outcome of the meeting. If the issue is not resolved at the meeting, then we will be compelled to suspend the USSSD code,” Adebayo told THISDAY in a telephone interview.

Pantami had initially written to the CBN governor, stressing the need for banks to pay the accumulated debt or risk suspension of the USSD code.

Adebayo, in an earlier statement, had alleged that following the issuance of the USSD pricing determination by the Nigerian Communications Commission (NCC), which resulted in a price review of USSD service by their members, the banks decided that they would no longer pay for USSD service delivered to their customers and requested Telcos to charge customers directly for use of the USSD channel.

He stated that this billing methodology where the Financial Service Providers customer is directly charged USSD access fees by the Telcos irrespective of the service charges that the bank may subsequently apply to the customers’ bank account is called “End-User Billing” which the banks demanded that all telcos should implement.

He noted that the banks provided no assurances to the telcos 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 the telcos.

“The removal of these service fees by the Financial Service Providers (FSPs) would have meant that if bank customers were charged only the USSD costs communicated by our members per USSD session, bank customers will be paying far less than what they are currently being charged by the Financial Service Providers (FSPs) which in some instances are as high as N50. Additionally the banks and telcos will be applauded for collaborating towards the financial inclusion objectives of the federal government,” he said.