Telcos To Block Millions From Mobile Banking Over Banks Debt

Telephone companies in Nigeria have threatened to suspend USSD services over indebtedness by banks.

Millions of Nigerians use the shortcode platform to access banking services daily through their phones, but the telcos say they’re being owed by the banks.

The Association of Licensed Telecommunication Operators of Nigeria (ALTON) said it’ll disconnect the banks from the service by March 15.

In a statement signed by its chairman, Gbenga Adebayo, and head of operations, Gbolahan Awonuga, the group on Friday explained that the withdrawal became necessary after its members and banks did not reach an agreement on a payment structure which will exclude phone users.

It said after the issuance of the USSD pricing, determined by the Nigerian Communications Commission, the banks decided that they might not buy USSD service delivered to their customers and requested the telcos to charge customers directly.

“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,” the group said.

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It said the removal of those service fees by the banks would have meant that if bank customers were charged only the USSD costs communicated by telcos per USSD session, bank customers are going to be paying far but what they’re currently being charged by the banks which in some instances are as high as N50.

“ it’s been quite eight ( months since the Nigerian Communications Commission (NCC) issued an updated pricing methodology for USSD services for financial transactions in Nigeria,” the group said.

“The methodology explicitly restricts Mobile Network Operators (MNO’s) from charging the top 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.

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

ALTON said it continued to supply these services despite not reaching an agreement considering many Nigerians who had become more reliant on accessing financial services through the USSD infrastructure thanks to COVID movement restrictions.

“Unfortunately, because it has been impossible to agree on a structure for these payments with the banks that don’t involve the end-user being asked to pay, the govt has been forced to intervene to make sure that a sustainable cost-sharing solution is agreed, that doesn’t disadvantage the buyer within the long-term.

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“We deeply regret that we’ve reached some extent where the withdrawal of those 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 therefore the Nigerian Communications Commission, on the large debt to the Network operators; Mobile Network Operators will disconnect debtorFinancial Service Providers (FSPs) from USSD services, until the large debt is paid.

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

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

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