By Chinenye Anuforo
Nine commercial banks facing imminent Unstructured Supplementary Service Data (USSD) disconnection by telecom operators are racing to settle their debts ahead of the January 27 deadline.
USSD is a communication protocol used by mobile phones to interact with a service provider’s computers.
It is commonly used for tasks like checking account balances, transferring money or accessing other mobile banking services without needing an internet connection.
Nonetheless, sources within the ICT sector told Daily Sun that some banks have begun partial debt payments, while others, previously defiant, are now negotiating with the banks.
The development follows mounting pressure from telecom operators, who accused the Nigerian Communications Commission (NCC) of delaying decisive action, allowing USSD debts to balloon to approximately N160 billion.
USSD banking, an SMS-based service enabling mobile phone-based bank interactions, is crucial for millions of Nigerian customers.
The NCC, besides disconnection, threatens to withdraw the shortcodes allocated to the nine delinquent banks.
“Some of them have started paying in bits, recognising the potential revenue impact. Those who previously ignored us are now seeking negotiations. This could have been addressed earlier, but the lack of regulatory enforcement fostered complacency,” revealed a senior telecom official on condition of anonymity.
Another industry insider criticised the NCC’s “excessive patriotism,” arguing that timely regulatory intervention would have prevented the debt crisis.
He said that banks not included on the NCC’s list have begun settling debts since last year, following a joint resolution by the NCC and the Central Bank of Nigeria (CBN).
Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) have been embroiled in a long-standing dispute regarding the appropriate pricing model for USSD financial transactions. Key areas of contention include pricing transparency, charging methods, and the responsibility for settling outstanding and ongoing service fees.
In March 2021, following intervention by the CBN and the NCC, a per-session price of N6.98 was agreed upon, encompassing all outstanding fees.
However, banks have been alleged to be deducting the N6.98 per session from their customers without remitting the agreed-upon amount to the MNOs.
The NCC in a recent move following its December circular, has authorised MNOs to disconnect nine banks from USSD services if they fail to settle outstanding debts by January 27.