The circular, dated December 20, 2024, highlights the issues caused by over unpaid charges for the use of USSD platforms by banks. 

This debt, which has negatively impacted relations between the banking and telecommunications sectors, has continued despite previous interventions. 

The circular, jointly signed by CBN’s Acting Director of Payments System Management, Oladimeji Taiwo, and NCC’s Head of Legal and Regulatory Services, Chizua Whyte, was obtained earlier this week.

Key Settlement Terms

According to the directive, banks are required to pay 60% of all outstanding invoices issued before the implementation of Application Programming Interfaces (APIs) in February 2022. 

This payment, which serves as a full and final settlement of pre-API debts, must be agreed upon by January 2, 2025, with a deadline for full payment by July 2, 2025.

For debts incurred post-API implementation, DMBs must pay 85% of all outstanding invoices by December 31, 2024. Moving forward, the same percentage of any new invoices must be cleared within one month of issuance.

Shift to End-User Billing

One of the incentives for compliance is the transition to an End-User Billing (EUB) model, where customers would bear the cost of USSD services directly, removing banks from the billing process. However, this will only apply to banks and telecom operators that meet the outlined payment obligations.

Litigation to Cease

In a move to foster cooperation, the regulators have ordered an immediate halt to all legal disputes related to the USSD debt. They also announced plans for a public awareness campaign to educate Nigerians on the transition to EUB once it is implemented.

Measures for Defaulters

The circular warned that any bank or telecom operator failing to comply with the terms would face penalties, including fines and operational restrictions. This reiterates the regulators’ determination to bring stability to both sectors and ensure uninterrupted access to financial services via USSD platforms.

Impact on the Economy

The settlement of this debt dispute is expected to have a huge impact on Nigeria’s financial and telecommunications sectors. In resolving the issue, the regulators aim to promote collaboration, restore confidence, and prevent further disruptions to services that millions of Nigerians rely on daily.

The telecom regulator made this announcement in a statement on Friday, stating that the licensing framework aims at addressing fraud, spam, and other challenges in the telecommunications sector,

The proposed framework was introduced during a virtual Stakeholders’ Forum, a key step towards enhancing the sector’s integrity and ensuring a fair, transparent environment for all parties involved.

Dr. Aminu Maida, the executive vice chairman of NCC, presented the draft framework, through Mrs. Chizua Whyte, the acting head of Legal and Regulatory Services at the NCC, during a stakeholders’ forum.

A2P messaging, used for notifications such as bank alerts, promotional campaigns, and government updates, has become a vital communication tool in Nigeria.

However, the sector faces significant challenges, including consumer protection concerns, fraud, and data privacy issues, as well as an unequal distribution of value within the ecosystem.

“The international A2P messaging space in Nigeria faces gaps that have led to issues such as fraud, spam, and data privacy concerns. These challenges threaten the sustainable growth of this communication tool,” the NCC said.

The regulator emphasised its commitment to fostering innovation while ensuring a secure, transparent environment for businesses, consumers, and service providers.

The proposed framework aims to address these challenges by protecting consumers, promoting fair competition, and holding service providers accountable.

“This forum marks a pivotal step towards addressing these challenges,” the NCC said. “We are here to engage with all stakeholders—operators, aggregators, businesses, service providers, and consumers—to refine the framework and ensure it meets the needs of the entire ecosystem.”

The NCC stressed the importance of inclusivity and collaboration in creating an effective regulatory environment.

The commission’s efforts are focused on promoting a sustainable A2P messaging ecosystem that enables business innovation, enhances communication efficiency, and supports Nigeria’s socio-economic growth.

Stakeholders were encouraged to provide feedback and contribute ideas during the forum to help shape the final framework.

The NCC reiterated its commitment to creating a regulatory environment that supports innovation while safeguarding the interests of all stakeholders in the A2P messaging sector.

For further updates, the NCC urged stakeholders to remain engaged throughout the regulatory process, stressing the importance of cooperation in shaping the future of A2P messaging in Nigeria.