The anticipated disconnection of Unstructured Supplementary Service Data (USSD) services for nine Nigerian banks may be averted as the affected banks have initiated steps to settle their outstanding debt before the January 27 deadline.
Sources within the telecommunications industry confirmed that some banks have begun partial payments of the N160 billion owed to Mobile Network Operators (MNOs), while others are seeking negotiations.
This shift comes after years of defiance and mounting pressure from the Nigerian Communications Commission (NCC) and telecom operators.
The USSD platform, widely used by millions of Nigerians for bank transfers, bill payments, and airtime purchases, has been at the center of a prolonged standoff between Deposit Money Banks (DMBs) and MNOs.
The dispute stems from disagreements over the pricing model, transparency of charges, and liability for payment.
In 2021, the NCC and Central Bank of Nigeria (CBN) brokered a per-session cost of ₦6.98, which banks agreed to deduct from customers. However, telecom operators allege that banks have not been remitting these charges, leading to an accumulation of unpaid debts.
In December 2024, the NCC and CBN issued a joint circular detailing steps for resolving the debt. These included a mandate for banks to: Settle 85% of outstanding invoices issued after Application Programming Interface (API) implementation by December 31, 2024.
Finalize payment plans by January 2, 2025, with full settlement by July 2, 2025.
READ ALSO: NCC orders disconnection of nine banks over unpaid USSD invoices
The NCC subsequently approved the disconnection of USSD services for nine non-compliant banks: Fidelity Bank, FCMB, Jaiz Bank, Polaris Bank, Sterling Bank, UBA, Unity Bank, Wema Bank, and Zenith Bank. Shortcodes assigned to these banks would also be withdrawn after January 27, 2025, unless debts are resolved.
Facing potential service disruptions that could harm their revenue and customer loyalty, some banks have started making payments. A telecom official, who preferred anonymity, said:
“Some banks are now paying in bits, realizing the impact of disconnection on their revenue. Those who previously ignored our warnings are now seeking negotiations.”
The official criticized the regulatory body for its delayed action, attributing the escalation of the debt to the NCC’s cautious approach.
“If the regulator had allowed us to take necessary actions earlier, the issue wouldn’t have reached this magnitude. Too much patriotism has been a problem,” he said.
Financial and telecommunications experts are divided on the implications of the sanctions.
Dr. Adeola Fagbemi, a financial analyst, noted: “The USSD service is integral to Nigeria’s financial inclusion strategy. While the banks have defaulted, disconnection could harm millions of Nigerians who rely on the service for everyday transactions.”
READ ALSO: NCC, CBN in talks to resolve N250bn USSD debt crisis between Banks, telcos
Conversely, telecom consultant Chidi Okafor argued: “This is a necessary wake-up call for banks. They have benefited immensely from USSD without fulfilling their obligations to the telecom sector. Sustaining this debt could jeopardize the telecoms’ ability to maintain infrastructure.”
The impending sanctions highlight broader issues in Nigeria’s financial and telecom sectors, including transparency in service charges and the regulation of inter-sector relationships.
The NCC and CBN’s joint efforts to enforce compliance may signal a stricter regulatory stance moving forward. However, the resolution of this issue will be critical in determining the future of USSD services and the stability of Nigeria’s financial ecosystem.