Nigerian Banks Owe MTN, Airtel, Others N150 Billion for USSD Service
- Source says money owed by banks to mobile network operators has reached N150 billion
- It has been revealed that the debt by the banks increased because they were lackadaisical with payment
- Meanwhile, Segun Agbaje, Group CEO of GTCo has said that the USSD was out of date
Unlock the best of Legit.ng on Pinterest! Subscribe now and get your daily inspiration!
The amount that deposit money banks (DMBs) owe mobile network operators (MNOs) for the usage of the Unstructured Supplementary Service Data (USSD) has risen to N150 billion,
Previously Legit.ng reported that the Nigerian Communications Commission (NCC) has given telecommunications providers in Nigeria new standards in an effort to enhance consumer relations and experiences.
Source: UGC
The leadership of Mobile Network Operator, MNO, according to information obtained by The Nation claims that the debt has risen further because several banks, particularly the major ones, are either unable or unwilling to make payments.
This is not surprising considering that customers without smartphones have increasingly turned to the USSD, a technology from the 1980s, to access digital banking services during the past ten years.
PAY ATTENTION: Join Legit.ng Telegram channel! Never miss important updates!
This allows owners of feature phones to perform tasks including making cash transfers, checking account balances, and producing bank statements by just dialing a code.
Telco vs Bank historic dispute
When the banks threatened to block the telecoms' access to USSD platforms in 2019, the argument between the two parties got underway. They suggested that the cost of USSD sessions should be covered by banks.
The former CBN governor had stated that because the original investment was considered a "sunk cost," MNOs were no longer investing a dollar in USSD infrastructure.
After lengthy talks and the intervention of the Nigerian Communications Commission (NCC), CBN, and Federal Ministry of Communications and Digital Economy, the banks agreed to pay and N6.98 would be transferred to telcos from customers' bank accounts.
“The good news, however, is that the new leadership at the CBN is addressing the issue with sincerity now and hopefully we would see improvement in terms of payment.
The previous leadership at the CBN had a lackadaisical attitude to the issue which emboldened the banks. The cash we are asking them to remit has been deducted by them from the bank customers,” the source said on condition of anonymity.
Notably, the issue centres on how a transaction is technically defined. Many customers end their session before a financial transaction has been completed, despite the banks' claims that costs are only assessed once a transaction has been completed.
According to the telecoms, banks should start billing consumers as soon as the proper code has been successfully dialed.
According to Gbenga Adebayo, chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), the banks continue to withhold payment, burdening the telcos with a sizable sum of accounts receivable linked to USSD session costs. He added that the the impact of the debt burden is huge because of the calibre of banks owing
Segun Agbaje, group CEO of GTCo, criticised the USSD technology, claiming it was out-of-date. He argued that data costs should decrease so that consumers can use internet banking in place of USSD.
He further stated that the company's USSD value fell by 22%. According to him, the N6.98 payment is a punitive penalty and the majority of people do not want to pay that to use the USSD, which is the cause of this subpar performance. It has stopped growing because of this.
NCC Releases Telcos With Highest Subscribers as Nigeria Adds 20 Million New Mobile Subscriptions in 2022
The Nigeria Communications Commission (NCC) said Nigeria hit a new mobile subscription milestone as telephone companies in the country added about 23.48 million new subscriptions last year, bringing total mobile subscribers to 218.61 million, legit.ng earlier reported.
The numbers show Nigeria’s leading position in the telecoms industry in Africa, largely due to its massive population.
The West African country has the largest mobile population in Africa and a young and vibrant populace, all getting into the eligible mobile subscriber age, Business Insider reports.
Source: Legit.ng
