The disruption in the provision of USSD services stands to affect an estimated 40 million consumers, who rely on the short codes as opposed to internet services.
Telecommunications service providers, through the Association of Licensed Telecommunications Operators of Nigeria (ALTON) have announced that they will be withdrawing the USSD services on account of accumulated debt from banks.
ALTON, in a statement signed jointly by its Chairman and Head of Operations, Gbenga Adebayo, and Gbolahan Awonuga, respectively, made this announcement on Friday.
“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.” The statement reads. “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. We deeply regret that we have reached a point where the withdrawal of these services has become unavoidable.”
The suspension is set to begin in phases from March 15.
The statement disclosed that service providers partnered with financial service providers over bearing the cost of USSD access by consumers, however, the agreement was suspended due to the issuance of the USSD pricing determination by the Nigerian Communications Commission.
ALTON stated that it had provided access to the USSD infrastructure and paid all the necessary charges to make use of the banking sectors supportive infrastructure, however banks are yet to remit the monies to telecoms companies, an amount the body says has reached over N42 billion.
Last August, the NCC directed all mobile service providers to charge banks directly for USSD services,in a bid to protect consumers and support the sector.
“Mobile Network Operators have no direct relationship with bank customers, and cannot therefore charge directly for usage of USSD channels,” the minister of Communication and Digital Economy, Isa Pantami had said, the Operators and Banks were to agree on pricing for the service.
In June 2020, Statista reported that the value of USSD transfer payments in Nigeria amounted to over 390 billion Naira, noting the increase in USSD transactions going from N30 Billion to N390.5 billion between January and June 2020.
The disruption in the provision of USSD services stands to affect an estimated 40 million consumers, who rely on the short codes as opposed to internet services, and a regression in Nigeria’s plan to encourage the cashless economy.
The banking sector will take a hit as reports show that monthly transactions pegged at about N230 billion would slump.
