USSD SAGA: Will the suffering of Nigerians ever end?

By Michael Orodare

According to the Oxford dictionary, suffering is defined as ‘The state of undergoing pain, distress, or hardship’.

Irrespective of one’s social status in Nigeria, a resident in the country must experience one form of suffering or another. The issues stem from poor infrastructure such as bad roads, poor health care system, epileptic power supply, substandard educational system, insecurity as a result of insurgency, overpopulation resulting to unemployment and the rise of the poverty numbers- According to a World Bank report, 40 percent of the total population, or almost 83 million people, live below the country’s poverty line of 137,430 naira ($381.75) per year.

The middle class and well to do Nigerian have a better opportunity to escape from the daily realities that is experienced in the nation with the largest economy in Africa but still lives in perpetual fear of insecurities and cannot escape commuting the bad roads daily.

As if the existing pain is not enough to bear, there seems to be no end to what more is to come. The ongoing saga with Banks and Telecom companies is one of such issues. Poor Nigerians trying to make a living for themselves are once again left to experience another form of pain. This time around this is being initiated by financial institutions. As a result of the insensitive and selfish nature of banks, they want customers to be billed separately for USSD services by them and also by the telco companies which is an unnecessary burden on the customers.

The background to this problem was that in order to accelerate the adoption of financial services on USSD, the Financial Service Providers (FSPs) partnered with telco members to zero-rate the USSD access to end-users, while they bore the cost for the provision of service. Based on this arrangement, the banks took on the responsibility of billing customers and paid telcos for use of the USSD infrastructure from the service fees deducted from the customer’s bank account.

However, the FSPs defaulted on their initial agreement with the telcos by refusing to continue paying for the USSD services delivered to their customers. Rather, the FSPs specifically demanded that the telcos should implement “End-User Billing,” which would enable them to charge customers directly for the usage of the USSD channel. This line of action was taken by the banks after the issuance of the USSD Pricing determination by the Nigerian Communications Commission (NCC) which resulted in a price review of USSD services by the telcos.

Following the Nigerian Communications Commission (NCC)’s USSD pricing determination published on June 23, 2019, Network providers reviewed the pricing for USSD services. This review led to a protracted dispute between Mobile Network Operators and Financial Institutions on the applicable charges for USSD services and the method of billing. Banks insisted they could no longer bear the cost of providing USSD services to end-users, and requested that Network Providers charge customers directly for the use of the USSD channel irrespective of what they (banks) may subsequently charge the customer’s account. Network Providers could not agree to this arrangement because the banks were giving no guarantees that they would not in turn, charge end-users for the same services they were already paying for.

The concern to MTN and other Telcos was that separate charges by the banks and telecoms companies simply means dual charges to be made by consumers which is inconveniencing, especially to the target group that the National Financial Inclusion Strategy is aimed at.

It is also no longer news that Banks are owing Telcos an outstanding charge to the tune of N42 Billion. In the midst of all this, telco companies maintained providing their services to their customers despite the mounting debts just in ensuring their customers have access to the USSD platform and carry out their business as usual. However, banks have shown willingness to cut off services to telco customers in order to protect their bank’s profits.

Just recently, Banks decided to stop MTN services from their infrastructure without prior notice to customers. The overnight suspension of airtime sales by some of the banks was not restricted to USSD channels alone, but included airtime purchases through all banking channels – bank apps, bank USSD codes, even debit cards.

It is also quite alarming that the CEO of Access Bank Plc; Herbert Wigwe, denied that Nigerian banks are not indebted to MTN Nigeria and other phone companies for using telecommunication platforms to provide payment services which is contrary to the joint statement by the Central Bank of Nigeria (CBN) and Nigeria Communications Commission (NCC) on Pricing of Unstructured Supplementary Service Data (USSD) Services chaired by the Honourable Minister for Communications and Digital Economy; Dr Isa Ali Ibrahim Pantami on March 15, 2021 .

The meeting had in attendance key stakeholders to discuss an amicable resolution in the interest of the general public. Part of the discussion was for both parties to work out a settlement plan for outstanding payments incurred for USSD previously rendered by the Mobile Network Operators. Wigwe’s denial to this fact is not only sending out a wrong signal but also reveals the bank’s inability to cooperate with telcos in ensuring this issue is amicably resolved.

There has also been ongoing efforts by the government to ensure that the misunderstanding by the two parties are settled however there is still the concern of banks having billed and are still billing for USSD services, payment is to be by customer going forward. In other words, customers are paying twice.

Nigerians have several challenges they face daily and this should by no means be one of them.

It is now necessary that the Federal Competition and Consumer Protection Commission (FCCPC) steps in and take necessary actions in protecting the interest of customers who rely on the USSD services for their daily business.


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