Bank and telcos’ talks on N120b USSD debt stalled, customers to bear brunt of service withdrawal
By Jeph Ajobaju, Chief Copy Editor
Misunderstanding between banks and telecom firms of what constitutes a successful transaction is the reason for the dispute over revenue from Unstructured Services Data (USSD), according to the Central Bank of Nigeria (CBN).
The CBN disclosed it has been engaging all stakeholders to resolve the protracted disagreement.
“Indeed, it was due to the direct intervention of the CBN, particularly the CBN Governor, in March 2021, that a per session price of N6.98, including to settle any outstanding fees, was agreed between the banks and telcos,” acting CBN DCorporate Communications Director Isa AbdulMumin said.
“As far as we are aware, since 2021, DMBs [deposit money banks] continue to collect the USSD fees and remit same on behalf of the telcos based on that agreement.
“We understand the latest dispute concerns technical issues regarding definition of a successful transaction from a bank and telco perspective.”
Telcos alleged banks are playing the ostrich, hiding under technical misunderstanding to abdicate responsibility and breach business agreement.
“We are not backing down this time around. We don’t want to know what excuses they are giving for owing such a humongous amount, what would make sense is for them to pay,” Association of Licensed Telecom Operators in Nigeria (ALTON) Chairman Gbenga Adebayo told Vanguard.
“We have given the banks notice according to the terms of agreement we have with each bank and at the expiry of the notice, we will withdraw services fully, no going back.”
Adebayo said depending on the terms of agreement the telcos have with individual banks, some got two days’ notice, some one week, and others one month to organise themselves and settle their bills or risk total withdrawal of USSD service.
Telcos last week got the approval of the Nigerian Communications Commission (NCC) to unplug their support on the USSD platform of banks.
Withdrawal of USSD means bank customers will no longer access transactions done on mobile phones such as fund transfer through short codes, checkin bank details and account balances, among others, without data or internet connections.
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CBN, stakeholders brainstorming solution
The NCC approval is on the back of growing USSD debt now more than N120 billion.
Communications and Digital Economy Minister Isa Pantami has reportedly called a meeting between the NCC, telcos, and banks to find a middle ground, but banks and their regulator shunned the meeting, per reporting by Vanguard.
The CBN clarified the dispute is basically a misunderstanding of the correct billing method.
“USSD fees are charged by DMBs using an automated system which bills the customer for a successful transaction only after a banking service is consumed,” AbdulMumin explained.
“For the telcos, a successful transaction happens once the customer has dialed the USSD short code which may not lead to the consummation of a banking service.
“Whilst such truncated transactions are not registered on the DMBs collection platform and thus not billed to bank customers, telcos expect the DMBs to charge customers once the short code is dialed, whether or not a financial transaction is consummated.
“At a recent meeting of the DMBs and telco representatives chaired by the Governor, CBN to resolve the issue, he acknowledged the telcos’ right to collect all legitimately earned fees due to them and to recover their cost.
“Following discussion the direct billing model was proposed as a lasting solution to the issue. This would enable telcos full visibility of USSD transactions and allow them to charge their customers directly.
“The feasibility of the model is still being worked out by the relevant stakeholders.
“USSD is a critical channel leveraged primarily by the financially excluded, vulnerable and critical mass. The CBN remains committed to ensuring that the areas of contention related to collection of telco charges for USSD are resolved in the interest of the financial system and overall economy.”
