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Confusion as banks disconnect MTN subscribers from USSD channels

It is a plot to avoid payment of N42 billion debts to MNOs – analysts




Hard times await millions of telecommunication subscribers in Nigerians who rely on Unstructured Supplementary Service Data (USSD) for banking transactions and payment of certain bills, can report.

USSD is a second generation (2G) technology of Global System for Mobile Communications (GSM) protocol used to send text messages.

USSD is similar to Short Message Service (SMS) and millions of Nigerians, especially those using Feature Phones, leverage on this service to conduct payments and pay other bills.


Governor, CBN, Godwin Emefiele

However, an impeccable source revealed to that commercial banks have started barring these subscribers from using USSD; which the source believes is a plot to withdraw from the agreement to offset the N42billion debts they owe the telcos.


MTN Sim card

“The banks have started barring telecom subscribers from using USSD services; they have started with MTN subscribers. NCC really needs to step in fast because many subscribers would be wondering why they couldn’t perform the normal banking transactions using USSD platforms. You know that MTN has the largest subscriber base. So, if they succumb to this pressure others may follow. The banks actually want the telcos to forego the N42 billion debts they incurred using their networks for USSD services over the years and this has huge implications.

“Apart from limiting financial inclusion, we should not forget in a hurry how Etisalat exited the Nigerian telecommunications industry. If this is allowed to continue it will further sabotage the Foreign Direct Investment (FDI) drives of the Federal Government of Nigeria. You can’t use a business’ platform and refuse to fulfill you part of the bargain. ”, the source who preferred to remain anonymous told

“​The banks are willing to cut off services to customers in order to protect profits. The telcos have allowed debts of N42 billion to accrue to ensure services remain up.

“Banks have tried to remove the cost of using USSD, but are willing to cut off subscribers to protect their own fees earned through the channel.

“This only has to do with preservation of bank profits, which are already sub​​stantial and growing despite the wider economic conditions”, the source said.

Industry analysts have also noted that within the last four years+, the commercial banks in Nigeria have reported increased turnovers/earnings Year-On-Year as shown below:

  • 2017 – N148b/N8b 5.5%;
  • 2018 – N240b/N13b 5.5%;
  • 2019 – N320b/N14b 4.5%;
  • 2020 – N470b/N18b 4%;
  • 2021 – Projected N652b/N20b 4% Q1 & 2.5% YE.

“The government needs to step in and deal with this once and for all. Nigerian banks need to stop their tyrannical posture.

“Note that with their action, the banks are denying customers from accessing their money to make legitimate purchases/transactions. As far as I am concerned MTN has not told us they are disconnecting USSD service offerings to the banks. So, why are the banks behaving this way?

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Banks' earnings

“Therefore, it will not be wrong to say the banks are focused on bullying everyone to maximize their revenues. The banks did not send a formal communication to customers or to the Nigerian Communications Commission (NCC) that was party to the peace brokered between telcos and the banks. But I doubt if the Central Bank of Nigeria (CBN) is not aware of this!

“The simple truth is that they don’t want to pay the N42 billion debts to the telcos; they don’t want to pay! Rather, they want to surreptitiously factor it into a new price regime so that customers will unknowingly help them pay what they had already billed them. Of course telcos refused, which is why they are fighting them now.’s investigations show that the overnight suspension of airtime sales by some of the banks is not restricted to USSD channels alone, but includes airtime purchases through all banking channels – bank apps, bank USSD codes, even debit cards.

A customer to one of the new generation banks (bank’s name withdrawn) who identified herself as Bukola Agboola narrated her experience thus: “I needed to buy airtime to make some important calls, so I have tried to use my MTN line to recharge, but I am confused. I tried using USSD code but the service was delivering. It create confusion and chaos around me because the vast majority of businesses and individuals I am dealing with in this my business use USSD in checking accounts. USSD is convenience.

“They should just resolve this issue”, she pleaded with the parties.


Telcos had threatened to suspend USSD services to banks – recalls that the MNOs under the umbrella of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), had on March 12, 2021 threatened to withdraw USSD services to Financial Service Providers (FSPs).

Minister of Communications and Digital Economy, Dr. Isa Pantami

The plan was contained in a statement signed by the Chairman, Engr. Gbenga Adebayo​​​​​​ and the Head of Operations, Gbolahan Awonuga.

ALTON continues: “The background to this problem was that in order to accelerate the adoption of financial services on USSD, the Financial Service Providers (FSPs) partnered with our members to zero-rate the USSD access to end-users, while they bore the cost for the provision of service.  Based on this arrangement, the banks took on the responsibility of billing customers and paid our members for use of the USSD infrastructure from the service fees deducted from the customer’s bank account.

“Following the issuance of the USSD Pricing determination by the Nigerian Communications Commission (NCC) which resulted in a price review of USSD service by our members, 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.

“This billing methodology where the Financial Service Providers (FSPs) 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.


EVC of NCC, Prof. Umar Danbatta

“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.

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“​It has been more than eight (8) months since the Nigerian Communications Commission (NCC) issued an updated pricing methodology for USSD services for financial transactions in Nigeria. The methodology explicitly restricts Mobile Network Operators (MNO’s) from charging the end user for the services and mandates the banking sector to enter into negotiations to settle outstanding obligations and agree individual pricing mechanisms to be applied going forwards.

“During this time, Mobile Network Operators (MNO’s) have continued to provide access to USSD infrastructure and our members have continued to pay all Bank charges and fees to access the Banking industries assets and customers, despite the fact that obligations due from banks to telecoms companies for USSD services has reached over Forty-Two Billion (N42B) Naira.

“​ALTON members have continued to provide these services because our primary concern is that the millions of Nigerian customers who access financial services through our USSD infrastructure every day should be able to continue conducting their transactions. This was given greater importance when customers’ became further reliant on these services due to COVID movement restrictions. 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 government has been forced to intervene to ensure that a sustainable cost-sharing solution is agreed, that does not disadvantage the consumer in the long-term.

“​We deeply regret that we have reached a point where the withdrawal of these services has become unavoidable, however, we remain committed to working closely with the relevant Ministries and regulators to resolve this issue as quickly as possible. To minimise the disruption to customers, and with the concurrence of the Honourable Minster of Communications and Digital Economy and the Nigerian Communications Commission, on the huge debt to the Network operators; Mobile Network Operators will disconnect debtor Financial Service Providers (FSPs) from USSD services, until the huge debt is paid.

“Therefore, our members are initiating a phased process of withdrawal of USSD services, starting with the most significant debtors within the Financial Service Providers (FSPs) effective Monday March 15, 2021.

“While the withdrawal of USSD service is in place, we encourage our subscribers to kindly explore alternative channels with their Banks”, the statement concludes.

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As at the time of filing this report, the Financial Service Providers (“Banks) are yet to issue statements regarding the huge debts and threats by telcos to withdraw USSD related services.

Minister, NCC, CBN intervention:

To resolve the lingering dispute and ensure uninterrupted services to customers on USSD channel, the Minister for Communications and Digital Economy, Dr Isa Pantami on March 15, 2021 chaired a meeting of key stakeholders to discuss an amicable resolution in the interest of the general public.

Represented at the meeting were the various MNOs; ALTON, Association of Telecommunications Companies of Nigeria (ATCON), DMBs (represented by the Chairman, Body of Bank CEOs) and the sector regulators – Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC).

In a joint statement signed by the apex bank’s Acting Director, Corporate Communications, Osita Nwanisobi; and the Director, Public Affairs, Nigerian Communications Commission, Ikechukwu Adinde, the parties agreed that “Effective March 16, 2021, USSD services for financial transactions conducted at DMBs and all CBN – licensed institutions will be charged at a flat fee of N6.98k per transaction.

This replaced the then per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion.


Chairman of ALTON, Gbenga Adebayo

The statement also reads: “This approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.

“To promote transparency in its administration, the new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts.

“Banks shall not impose additional charges on customers for use of the USSD channel.

“A settlement plan for outstanding payments incurred for USSD services, previously rendered by the MNOs, is being worked out by all parties in a bid to ensure that the matter is fully resolved.

“MNOs and DMBs shall discuss and agree on the operational modalities for the implementation of the new USSD pricing framework, including sharing of Application Programme Interface (APIs) to enable seamless, direct and transparent customer billing.

“DMBs and MNOs are committed to engaging further on strategies to lower cost and enhance access to financial services.

“With the above resolutions, the impending suspension of DMBs from the USSD channel is hereby vacated. Therefore, DMBs shall no longer be disconnected from the USSD channel.


“The general public is reminded that the USSD channel is optional, as several alternative channels may such as mobile apps, internet banking and ATMs may be used for financial transactions.

“The CBN and NCC shall continue to engage relevant operators and stakeholders to promote cheaper, seamless access to mobile and financial services for all Nigerians”.

When contacted, the Director Public Affairs at NCC, Dr. Ikechukwu Adinde said that he was yet to be briefed about the development, promising to get back to after investigations on the matter.

As it stands, the subscribers who have been cut-off from these services may wait till after Easter Holidays to know their fate. And as MTN subscribers are groaning, who knows the next telco the banks are targeting?



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