Nine commercial banks in Nigeria are taking urgent steps to settle their outstanding debts to telecommunications operators ahead of the January 27 deadline, which could see their Unstructured Supplementary Service Data (USSD) services disconnected. The debt, which has accumulated to approximately N160 billion, has prompted the affected banks to begin making partial payments. For those yet to start, negotiations have intensified following the threat of disconnection and a potential impact on their revenue and customer base.
Sources within the telecommunications industry confirmed that some banks have already started paying, while others, previously resistant to action, are now requesting negotiations to avoid disruptions to their services. “Some of them have started paying in bits because they know this could impact their revenue. Those who have refused to listen to us before are now calling for negotiation,” one unnamed source said.
The issue, which stems from the use of USSD codes by bank customers for various financial transactions, has been ongoing for some time. The debt accumulated due to disagreements between the banks and mobile network operators (MNOs) over the pricing model for financial transactions, transparency of charges, and the mode of collection. In March 2021, the banks and telcos had agreed on a per-session price of N6.98, but the banks allegedly deducted the fee from customers without remitting it to the MNOs.
While telecom operators had called for prompt action, the Nigerian Communications Commission (NCC) has been criticised for delaying enforcement, which led to the escalation of the debt. One industry insider blamed the regulator’s reluctance to take decisive action, saying that if the necessary steps had been taken earlier, the debt issue could have been resolved sooner. “It’s the same problem we are having with tariff increases. We have been talking about the need to increase tariffs for years, but because the regulator does not want to ruffle feathers, tariff remains unchanged for over 11 years until it’s becoming a threat to the sustainability of the industry,” the insider said.
Both the NCC and the Central Bank of Nigeria (CBN) issued a joint circular in December 2024, outlining measures to resolve the USSD debt issue. The circular mandated Deposit Money Banks (DMBs) to settle 85 per cent of outstanding invoices issued after the implementation of Application Programming Interfaces (APIs) by December 31, 2024, with future invoices required to be settled within one month of issuance. Banks are also required to pay 60 per cent of invoices predating the API implementation as full and final settlement.
The joint resolution has led to some banks taking action, but only after the threat of severe sanctions. The NCC had previously issued a public notice warning that failure to settle the debt by January 27 would result in the disconnection of USSD services for the affected banks. In addition, the regulator confirmed that it would withdraw the shortcodes allocated to the banks if they fail to meet the deadline.
The affected banks include Fidelity Bank, First City Monument Bank (FCMB), Jaiz Bank, Polaris Bank, Sterling Bank, United Bank for Africa (UBA), Unity Bank, Wema Bank, and Zenith Bank.
This latest development highlights the ongoing tension between banks and telecommunications operators over USSD service charges and underscores the need for a more transparent and regulated approach to pricing and payment models in the sector.
