This week, the Nigerian Communications Commission will make public the identities of eighteen banks that have not paid their due debts for using the Unstructured Supplementary Service Data platforms of mobile network operators.
Together, these banks owe N200 billion, and the telecom regulator is getting ready to take action, which may include cutting off the defaulters’ access to USSD services.
According to impeccable industry sources who spoke to the press on Monday, only four banks have fulfilled the payment obligations specified in a joint directive issued in December 2023 by the NCC and the Central Bank of Nigeria.
According to the rule, banks and MNOs must agree on payment plans for 60% of pre-API (Application Programming Interfaces) invoices that need to be paid by January 2, 2025.
The other banks have not yet met their payment responsibilities, though. The unpaid debts for USSD services that were incurred before to the adoption of Application Programming Interfaces in February 2022 are known as pre-API invoices.
Prior to the use of APIs, USSD transactions were frequently handled with antiquated or less standardized techniques, which occasionally resulted in disagreements between banks and telcos on invoicing and reconciliation.
Nigerians who depend on USSD services for banking transactions, especially those without internet access, may be greatly impacted by the service suspension, which is anticipated to go into effect in two weeks.
Subscribers to these services will receive instructions on how to transfer to other banks in the public statement that the NCC will make, guaranteeing that their access to financial services won’t be interrupted.
The long-running debt issue between banks and telecom companies, which has been a source of tension for several years, is being resolved in part by the NCC’s action to uncover the defaulters.
Concerned about how the unpaid debt would affect the long-term viability of USSD services, telecom operators have threatened to discontinue the service.According to sources, MNOs have not followed through on their threats to terminate the service because of its vital role in the economy, but banks have been hesitant to give payments priority.
The CBN’s electronic payment statistics data indicate that 252.06 million transactions totaling N2.19 trillion were made through USSD between January and June 2024.
Compared to the full-year figures for 2023, which revealed that N4.84 trillion was transacted using USSD codes over 630.6 million transactions, this represents a notable rise.
The USSD service, which was first created by telecoms to offer airtime and subscription services, has gained widespread use in the banking industry due to its lack of Internet connection requirements.
The Association of Licensed Telecom Operators of Nigeria Chairman, Gbenga Adebayo, told the press in November that operators were making some headway in debt repayment, with smaller banks starting to pay their debts.
However, major payments have not yet been made by tier-one lenders, who bear the majority of the debt.
“We are seeing payments from smaller players, but the big banks, which owe the most, have not been forthcoming,” Adebayo said in a call.
“We are now waiting for intervention from regulators, including the CBN and NCC, to resolve the issue,” he added
Telecom providers are angry with banks for not paying enough for leased lines used for services like USSD, according to Ejike Onyeaso, director of Adaba Consult, who spoke to the press in October.
He emphasized that banks ought to pay telecom companies as they make money from these services. Onyeaso also cautioned that banking activities may be disrupted if telecom companies follow through on their threats to cease services.