A large part of the African population does not have access to banking services and the Internet. Banks and other financial service providers use USSD to facilitate access to their services for this segment of the population.
Nigerian telecommunications companies are seeking permission from the Nigerian Communications Commission (NCC) to discontinue the provision of Unstructured Supplementary Data (USSD) services to banks and other financial institutions. The latter have still not paid the 80 billion naira (180.1 million USD) that they owe to the telecom operators for services rendered.
According to Gbenga Adebayo, president of the Association of Licensed Telecom Operators of Nigeria (ALTON), the phase-out will be phased in once the initiative is approved by the NCC. Disconnection should be done in batches, starting with the largest debtors. “ It could happen around the first quarter [2023, Ed],” he said.
The question of USSD service pricing has been the subject of disagreement between banks and telecom operators since 2019. Telecom operators had already threatened to withdraw their USSD services from financial institutions from March 15, 2021 due to debt. accumulated which then stood at 42 billion naira. However, the intervention of the Central Bank of Nigeria (CBN) and the NCC helped to find a compromise. Last September, the telecom operators had to reiterate their threats in the face of the indifference of the banks.
The withdrawal of USSD services from banks, if approved, is expected to significantly affect the quality and availability of financial services provided to the people of Nigeria at all levels. It could also slow down the cashless economy ambitions of the CBN and the Nigerian government amid accelerated digital transformation.
Source: Agence Ecofin
