USSD Codes to Become Inactive as MTN, Airtel, Other Telcos Disconnect 18 Banks, Move to Remove More
- Telecommunication companies have reportedly pencilled down 18 banks for disconnection of their USSD codes
- The development comes as the banks have negated the agreements reached with CBN and NCC over N250 billion USSD debt
- The NCC has reportedly given a directive to the telecommunication companies to proceed with the disconnection
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Telecommunication operators have given notice to disconnect the operation of Unstructured Supplementary Service Data (USSD) of banks in two weeks over N250 billion debt.
USSD transactions, valued at N1.19 trillion by the Central Bank of Nigeria (CBN) from 252.06 million transactions recorded in the first half of 2024, may be threatened.
Source: UGC
Impending disconnection to affect bank customers
The data represents 12 billion daily USSD transactions, and the impending disconnection threatens Nigeria’s quest for financial inclusion.
Despite USSD transactions initially targeting areas with low internet access and feature phone users, the decline in digital banking service may have raised the USSD adoption rate among bank users.
USSD suspension service will reportedly kickstart in two weeks due to banks’ failure to comply with the December 20, 2024, joint directive of the CBN and the Nigerian Communications Commission (NCC), requiring financial institutions to pay part of the N250 billion debt by December 31, 2024.
Meanwhile, feelers show that the telcos may have suspended the USSD service of 18 banks, with more to come in two weeks.
18 banks are to be disconnected
According to a BusinessDay report, the telcos acted on the NCC's directives, and the commission promised to issue a formal statement soon.
According to sources, the two-week notice will allow subscribers to prepare for the possible disconnection.
The Guardian quotes sources at the NCC as saying that the commission approved the suspension, saying that if the errant banks make no serious attempt to pay, their USSD services will be deactivated.
About four banks have reportedly paid. However, the NCC said it will issue a formal statement on Tuesday, January 14, 2025, to that effect.
With the USSD debt entering the sixth year, bank customers rely on it for money transfers without internet access.
Experts say the imminent suspension would disrupt the banking community significantly.
Checks reveal that as of July last year, the number of active bank accounts in Nigeria hit 231.1 million, an increase from the 151 million active accounts recorded in 2022.
USSD transactions decline
Many of the 231.1 million active bank accounts use USSD for transactions. Data from the CBN showed that USSD transactions totalled N2.19 trillion between January and June 2024, a 54.75% decline from N4.84 trillion during the corresponding period 2023.
Transaction volumes also dropped to 252.06 million from 630.6 million in the period.
Disagreement over payment methods has marred the relationship between the banking and telecom operators, prompting regulators’ interventions.
Available statistics showed that banks charge N6.98 for every USSD transaction and are expected to remit them to the telcos.
Banks' USSD transactions hit N2trn
Legit.ng earlier reported that USSD transactions in Nigeria reached 252.06 million in volume and were valued at N2.19 trillion during the first six months of 2024.
This is according to data gathered from the Central Bank of Nigeria's latest electronic payment statistics.
This amount accounts for 45.3% of the total transaction value of N4.84 trillion recorded throughout 2023 and 40% of the overall transaction volume for the corresponding timeframe.
Proofreading by Nkem Ikeke, journalist and copy editor at Legit.ng.
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