Financial services drive 90 percent USSD traffic – Telcos

Telecom operators say 90 per cent of traffic on Unstructured Supplementary Service Data is driven by financial transaction carried out by bank customers in the country.

The network operators who are members of the Association of Licensed Telecommunications Operators of Nigeria say telcos only use the USSD channel for balance inquiry, data and airtime top-up.

The association made this clarification in view of the dispute between the banks and telcos over USSD access charges.

MTN Nigeria had sent a message to subscribers informing them that it would start charging customers N4 per 20 seconds for USSD voice or text messages that allow them to access bank services.

While the Body of Banks’ Chief Executive Officers denied having knowledge of the direct USSD access charge to customers, telcos insisted that banks agreed to the charges.

The USSD channel enables customers to carry out transactions using short codes without the need for Internet connectivity.

Explaining how the USSD service works, the Chairman, ALTON, Gbenga Adebayo, said the USSD channel was mostly used for the deployment of financial, insurance, agricultural and government services and delivered using the Standalone Dedicated Control Channel.

“The USSD channel has evolved over time from a telco exclusive channel used for only telco services such as balance inquiry and recharges, to a channel being utilised for the deployment of financial, insurance, agricultural and government services, etc. The USSD channel is delivered using the Standalone Dedicated Control Channel which is also used for call set-up, SMS set-up, and delivery,” he added.

According to him, network operators deploy a lot of resources to ensure optimum performance of the channel.

In view of this, Adebayo said it was expected for banks to be fully responsible for the charges associated with the use of the short codes.

“Similar to the other telco services such as SMS, voice and data, network resources are utilised in the provision of USSD services and as such, there are significant costs associated with deploying and maintaining the service,” Adebayo added.

“The banks, however, identifying the convenience of delivering services to its customers over the USSD channel, applied to the Nigerian Communications Commission for USSD codes to deliver these services. USSD Short codes were thereafter issued to the banks and as is expected, they became fully responsible for the charges associated with delivering services to their customers through these short codes.”

ALTON chairman said the USSD channel was a preferred service platform for the financial sector because of the cost efficiencies derived from its adoption.

A Nigeria Inter-Bank Settlement Scheme report indicated that interbank instant payments on USSD platforms grew by 35 per cent from N92.4m in 2017 to N261.7m in 2018.

Adebayo stated that customers should be billed once for delivery of mobile financial services (inclusive of all cost heads) and such cost should be borne by the banks.

Meanwhile, the NCC in a public notice had ordered an immediate suspension of end-user billing for financial transactions through USSD channel by all telecom operators.

MTN Nigeria also said it was ready to engage with stakeholders in the industry to find a solution to the USSD access charge dispute.