In a significant policy shift designed to resolve a long-standing conflict between telecom operators and Nigerian banks, the Nigerian Communications Commission (NCC) has issued a directive that mandates the deduction of Unstructured Supplementary Service Data (USSD) transaction charges directly from customers’ airtime balance rather than their bank accounts.
This directive, which took effect on Tuesday, June 3, 2025, marks a critical milestone in the NCC attempt to end the ongoing friction between Deposit Money Banks (DMBs) and Mobile Network Operators (MNOs) over accumulated USSD service debts — a figure that has reportedly surpassed N250 billion.
The United Bank for Africa (UBA) was among the first banks to officially notify its customers of the implementation. In an email alert circulated on Tuesday, UBA stated,
“In line with the directive of the Nigerian Communications Commission, please be informed that effective June 3, 2025, charges for USSD banking services will no longer be deducted from your bank account. Going forward, these charges will be deducted directly from your mobile airtime balance in accordance with the NCC’s End-User Billing model.”
Under this new arrangement, customers will incur a fee of N6.98 per 120 seconds of USSD session, which will now be charged by the respective mobile network operators. Additionally, users will receive a consent prompt before the deduction, and airtime will only be debited upon customer confirmation.
The new billing framework also empowers customers with the choice to opt out of USSD services if they are unwilling to continue under the airtime billing model.
UBA further advised its customers to explore other convenient alternatives such as mobile apps and internet banking platforms, which offer more cost-effective and seamless transaction experiences.
The NCC’s directive is seen as a decisive step toward addressing a crisis that has plagued Nigeria’s digital financial services sector for years. The impasse over USSD debts between telcos and banks reached a boiling point in late 2024, with telecom operators threatening to discontinue USSD services due to non-payment.
In January 2025, the NCC responded by ordering MNOs to disconnect USSD shortcodes assigned to nine commercial banks. The regulator had also threatened public sanctions if the banks failed to settle their debts. Following that, MTN Nigeria confirmed in February that it had received N32 billion out of a N72 billion owed by the banks.
The core issue revolved around which party — the banks or the telcos — should bear the cost of USSD infrastructure. Banks had previously deducted fees from customer accounts without remitting them to the telcos, leading to the staggering multi-billion-naira debt.
Industry analysts believe the NCC’s latest intervention could mark the end of that era.
Digital finance experts have applauded the move, saying it aligns with global best practices where telecom platforms providing backend infrastructure are directly compensated for their services.
“This is a long overdue correction,” said tech analyst Nduka Ogbonna. “If telcos are facilitating the infrastructure that supports financial inclusion via USSD, then it makes sense that they get paid directly.”
However, some users have expressed concerns over the impact on low-income earners and rural users who rely heavily on USSD for everyday banking. Critics argue that the airtime-based billing could discourage usage, especially in underserved regions.
With this new directive, users must ensure they have sufficient airtime before initiating USSD transactions. Banks will no longer bear the cost or allow postpaid deductions from customer accounts for such services.
This means greater transparency — and potentially better service delivery — but also places the financial burden squarely on users, which could drive a shift toward internet-based alternatives where data usage may be cheaper than USSD airtime costs in the long run.
As the NCC enforces its end-user billing model, the Nigerian financial ecosystem braces for a potential shift in digital banking behaviour. The directive is expected to not only ease the financial tensions between telcos and banks but also encourage the development of more robust and equitable service delivery across the telecom-fintech ecosystem.
Whether this change will expand or restrict access to financial services for Nigeria’s underbanked remains to be seen — but it certainly sets a precedent for clearer billing and accountability in the industry.