USSD: CBN imposes mobile banking charge — a setback for financial inclusion

The Central Bank of Nigeria and the Nigerian Communications Commission have imposed a new charge for mobile banking services in the country, in a bid to end a row between banks and telecoms operators.

From Wednesday, March 16, phone users using their devices for mobile banking will be charged a flat rate of N6.98 per transaction, the regulators announced Tuesday, a move likely to hurt gains made in expanding financial inclusion in the country.

The decision comes days after telecoms companies threatened to suspend access to the so-called USSD facility, which allows phone users check their bank accounts, transfer and receive money, and pay their bills.

The short code service has been popular in a country with a relatively low penetration of financial services. Many nongovernmental organisations have sought to encourage financial inclusion by encouraging mostly the nation’s poorest population to make use of the Unstructured Supplementary Service Data (USSD).

After years of unresolved controversy over payment for the service, the Association of Licensed Telecommunication Operators of Nigeria (ALTON) on Friday said it would disconnect the banks from the service by March 15.

The group said its members were owed N42 billion by banks.

In a statement signed by its chairman, Gbenga Adebayo, and head of operations, Gbolahan Awonuga, the group said the withdrawal became necessary after its members and banks failed to reach an agreement on a payment structure that will exclude phone users.

“The banks, however, provided no assurances to our members that such service fees charged to customers’ bank accounts for access to bank services through the USSD channel would be discontinued post implementation of end-user billing by our members,” it said.

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The CBN and the NCC said they held meetings with both sides and resolved that customers should pay for the service.

Read the full statement released Tuesday.

JOINT STATEMENT BY CENTRAL BANK OF NIGERIA AND NIGERIAN COMMUNICATIONS COMMISSION ON PRICING OF UNSTRUCTURED SUPPLEMENTARY SERVICE DATA (USSD) SERVICES

Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions.

This resulted in the accumulation of outstanding fees for USSD services rendered leading to potential service withdrawal by the MNOs.

USSD is a critical channel for delivering financial services, particularly for the underserved and/or financially excluded. To resolve the lingering dispute and ensure uninterrupted services to customers on this channel, the Honorable Minister for Communications and Digital Economy on March 15, 2021 chaired a meeting of key stakeholders to discuss an amicable resolution in the interest of the general public.

Represented at the meeting were the various MNOs, Association of Licensed Telecoms Operators of Nigeria (ALTON), Association of Telecommunications Companies of Nigeria (ATCON), OMBs (represented by the Chairman, Body of Bank CEOs) and the sector regulators — Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC).

We are pleased to announce that after comprehensive deliberations on the key issues, a resolution framework acceptable to all parties was agreed thus:

1. Effective March 16, 2021, USSD services for financial transactions conducted at DMBs and all CBN – licensed institutions will be charged at a flat fee of N6.98 per transaction. This replaces the current per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion.

This approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.

2. To promote transparency in its administration, the new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts. Banks shall not impose additional charges on customers for use of the USSD channel.

3. A settlement plan for outstanding payments incurred for USSD services, previously rendered by the MNOs, is being worked out by all parties in a bid to ensure that the matter is fully resolved.

4. MNOs and DMBs shall discuss and agree on the operational modalities for the implementation of the new USSD pricing framework, including sharing of Application , Programme Interface (API) to enable seamless, direct and transparent customer billing.

5. DMBs and MNOs are committed to engaging further on strategies to lower cost and enhance access to financial services.

6. With the above resolutions, the impending suspension of DMBs from the USSD channel is hereby vacated. Therefore, DMBs shall no longer be disconnected from the USSD channel.

The general public is reminded that the USSD channel is optional, as several alternative channels such as mobile apps, internet banking and ATMs may be used for financial transactions.

The CBN and NCC shall continue to engage relevant operators and all stakeholders to promote cheaper, seamless access to mobile and financial services for all Nigerians.