The lingering and yet-to-be-resolved N120 billion Unstructured Supplementary Services Data (USSD) debt dispute between commercial banks in Nigeria and telecom operators is once again posing a threat to the federal government’s financial inclusion initiative.
This challenge first emerged in 2020 when the federal government aimed to increase the number of Nigerians with bank accounts or those contributing to financial flow through mobile banking. The disagreement between banks and telecom companies over USSD debt became a significant hurdle.
In March 2021, telecom operators announced their intention to stop the use of USSD by banks and financial institutions. The Association of Licensed Telecommunications Operators of Nigeria (ALTON) disclosed that the Nigerian Communications Commission (NCC) granted approval to disconnect Deposit Money Banks (DMBs) if they failed to pay the N120 billion debt owed for USSD services.
Despite efforts to resolve the situation, including interventions by the NCC, CBN, and the Minister of Communications and Digital Economy, the issue persisted. The debt increased to N120 billion, prompting another threat from telecom operators to disconnect banks from USSD services.
The Central Bank of Nigeria (CBN) quickly intervened in May 2023, emphasizing its awareness of the dispute and ongoing efforts to achieve an amicable resolution. The CBN’s direct intervention in March 2021 had resulted in per-session billing of N6.98 billion between banks and telcos.
As of the latest developments, telecom operators report that a firm agreement on when and how banks will pay the debt is yet to be reached. The President of ALTON, Engr Adebayo, confirmed ongoing discussions but highlighted that the mechanism for payment remains unresolved.
The delay in settling the debt raises concerns about its impact on the financial inclusion drive of the CBN. USSD services, provided to banks by telecom operators, play a crucial role in facilitating financial transactions for bank customers. Failure to reach an agreement soon could result in telecom operators disconnecting bank customers from USSD access, significantly affecting online banking transactions.
Analysts warn of potential disruptions to financial transactions if a resolution is not achieved promptly. Bank customers may face challenges in utilizing USSD platforms for essential banking services, adding urgency to the need for a conclusive agreement between telecom operators and banks.
The USSD debt saga continues to cast a shadow on Nigeria’s financial landscape, emphasizing the importance of resolving disputes that impact the nation’s broader economic objectives.
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