Telcos-Banks Impasse: Why Your Bank’s USSD Code is not Working

Indication has emerged that many Nigerians woke up at the weekend only to discover that they cannot access their bank’s services via Unstructured Supplementary Service Data (USSD) services as usual. This may be a fall out from one of the banks that have been cut off due to the over N120 billion banks owe Mobile Network Operators (MNOs).

Deposit Money Banks (DMBs) have been owing telcos for many years now and despite several interventions by the Nigerian Communications Commission (NCC), the Hon. Minister of Communication and Digital Economy, Prof. Isa Ali Pantami, and the Central Bank of Nigeria (CBN), the issue is yet to be resolved.

In 2021, when the telcos under the auspices of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) moved to disconnect banks from USSD services, but the NCC prevented them from doing so. The NCC cited the disruption it would cause to the administration’s digital and financial inclusion policy. The telcos had no other option than to back down. The debt was about N42 billion at that time.

After two years of inaction from the banks after the FG’s intervention, and the matter has risen again and the NCC has approved that the telcos can disconnect the banks. The Minister gave this mandate on Friday, 12 May, and the telcos moved in swiftly (like Palmpay agents), because they have been incurring costs and developing the USSD channels for the banks without receiving payment.

The flipside of this debt is that it should not even exist in the first place because the banks charge customers for USSD services. Customers daily go on social media complaining about USSD charges from banks and sharing receipts of those charges. Since these charges are borne by customers, it is trite to ask the banks what they have been doing with these charges that are not remitted to the telcos for providing the USSD services.

Fortunately, customers can explore alternatives to USSD channels by resorting to bank apps, mobile money agents, and platforms provided by Payment Service Banks. By and large this disconnection may be the incentive that banks need to pay up and keep the USSD services up and running.

However, the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday said the current disagreement between telecoms firms and deposit money banks (DMBs) over non-payment for the provision of the Unstructured Supplementary Service Data (USSD) transactions must be resolved in the overall interest of financial consumers.

Speaking at the ceremony in Abuja, Emefiele expressed optimism that the dispute between the banks and telcos which had dragged on for over three years, would be amicably resolved especially through the instrumentality of the central bank.

Telecom operators in Nigeria had last Friday withdrawn their services to banks, causing customers difficulty in accessing online banking transactions that depend on the platform. These are transactions conducted on mobile phones like fund transfers through shortcodes, and checking of bank details and account balances, among other services with or without data or internet services.

The spokesperson for the CBN, Dr. Isa Abdulmumin, on Monday, explained that the apex bank was on top of the situation, blaming the dispute on technical issues regarding the definition of a successful transaction from a bank and telco perspective.

Commenting on the dispute, Emefiele said, “If we do not resolve the problem, the people will suffer. Like we say, when two elephants fight, it is the grass that suffers.

“Those that will suffer when these disagreements linger would be the users of banking services.”

The CBN governor particularly noted that the USSD technology was brought into the financial inclusion design because it remained a great enabler for the vulnerable people in the nooks and crannies of the country.

Nonetheless, he said to address the financial inclusion gaps, the National Financial Inclusion Strategy 2022, identified increasing adoption and usage of financial services in priority demographics comprising of the most vulnerable segments including women, youth, MSMEs, rural dwellers and especially, the Northern part of the country as well as expansion of digital financial services and platforms among its strategic priority areas.

Emefiele said to achieve these objectives, deliberate steps must be taken to upscale financial capability through financial education programmes, adding that shortage of skilled and experienced persons to drive financial education remained a major hindrance.

Emefiele stressed that the National Financial Inclusion Strategy 2022 places high priority on financial and digital learning as a strategy that would enable the creation of a conducive environment for serving or ensuring the inclusion of the most excluded groups.

The central bank governor stressed that financial literacy remained one of the key drivers of financial Inclusion – and constitutes a prerequisite for greater financial inclusion, which would lead to the stability of the financial system and ultimately economic growth and development.

He said the apex bank would do everything possible to achieve the 94 percent financial inclusion target by the end of January 2024.

He said, “We made a promise that by 2022, we would have gone close to 80 per cent financial inclusion and 2024, we would have achieved 95 per cent.

“Unfortunately, we are where we are today which is just below the 70 per cent mark.”

Lagosbusinessnews maintains that it will be gratifying that this impasse is resolved swiftly to douse customers’ difficulty in accessing online banking transactions that depend on the platform. These are transactions conducted on mobile phones like fund transfers through shortcodes, and checking of bank details and account balances, among other services with or without data or internet services.