Agony! Bank customers groan as telcos suspend USSD services over N120bn debt

By AYOOLA OLAOLUWA

Millions of Nigerians at the weekend went through harrowing experience and hardship after being caught in-between the lingering feud between Mobile Network Operators (MNOs) and Deposits Money Banks (DMBs) over the N120billion debt owed by banks to telcos for Unstructured Supplementary Service Data (USSD) services.

On Friday and Saturday, most customers, who use USSD services provided by telcos to transact business were left stranded by the unexpected decision of telcos to effect the approval given to them by the Nigerian Communications Commission (NCC) to disconnect DMBs for refusing to pay the debt owed them for USSD services, as they were unable to successfully make financial transactions via USSD channels.

The unexpected withdrawal of USSD service caused chaos and confusion among many customers, who account for over 70% of bank transactions.

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) had on Friday, May 12, 2023, announced that it had secured NCC’s approval to cut off banks from the USSD service over N120 billion debts they are owing its members.

According to ALTON Chairman, Gbenga Adebayo, the approval was granted after all multiparty stakeholder efforts by the Minister of Communication and Digital Economy, Prof. Isa Pantami, the NCC and the Central Bank of Nigeria (CBN) to resolve the crisis between the telcos and banks failed to yield any fruit.

“Every time some progress is made, the DMBs come up with reasons to take stakeholders several steps back, in this matter.

“Members of the public will recall that MNOs and DMBs have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions, transparency of charges, mode of collection and liability for payment of the outstanding and continuous service fees due to the MNOs (which currently stands at over N120 billion).

“Unfortunately, the patriotic intervention of the Hon. Minister and the NCC have been taken for granted by the DMBs, as two years after, the banks have failed to sign a final agreement.

“It is pertinent to note that the contract between MNOs and DMBs on the use of USSDs for banking transactions is strictly commercial and MNOs are at liberty to withdraw the services if it is established that the transaction is unprofitable to them. MNOs have invested billions of naira in expanding their systems to accommodate the USSD needs of DMBs over the years.

“This has resulted in more Nigerians having access to banking services in addition to enabling banks to trim down costs by requiring less branches to service their growing customers.

“Unfortunately, MNOs are not getting paid for their services and the debt that stood at N42 billion in 2021 has now risen to over N120 billion.

“It is obvious that the level of debt is unsustainable given the time/value huge cost of the continuous upgrade and operation of the systems and infrastructure dedicated to supporting USSD transactions of DMBs”, the ALTON chairman had told newsmen on Friday.

Despite ALTON’s announcement that it had secured NCC’s approval to suspend USSD service to banks, many Nigerians were not expecting the telcos to immediately go ahead with the implementation of the NCC approval as the telcos did not put a timeline to when the approval would be enforced.

Some Nigerians, BH gathered, started experiencing difficulty in sending money or making financial transactions like checking their account balances, BVNs and other services on Friday night.

However, some of the affected customers, who spoke to our correspondent on the matter, claimed they initially thought the hiccups were due to network issues.

But when the challenge refused to abate by close of work on Friday, the bank customers became agitated.

By Saturday morning, it had dawned on many that the problem was more serious than they had envisaged.

However, the situation of things became clearer when some banks officials informed their customers that the telcos had in fact cut off the USSD services around 7.00pm.

Some of the affected customers told our correspondent that the suspension of the USSD service had greatly affected them.

According to the respondents, most of them, apart from not having android phones where they can download bank apps to make transactions, are also not literate enough to go through the stages of initiating and completing financial transactions through mobile apps.

“It is quite unfortunate that the policy (suspension) will be affecting illiterates and indigent Nigerians like us.

“Since Friday evening, I’ve not been able to pay the people that I owe. I thought it was a network problem until news broke on Saturday that the service had been suspended.

“How do they want people like us to comply with the CBN cashless policy? One, I don’t have the resources to purchase a big (android) phone. The one I am using. I bought it for N8,000 in 2020.

“With it, I can do any financial transaction by just pressing the *894# or *901# to access my First Bank and Access Banks accounts and then go ahead to complete any task.

“Now, that is no longer possible because I must upgrade to a bigger phone to be able to make financial transactions online.

“Apart from the funding challenge, I can hardly operate a big phone. I’m even trying as most of my colleagues can’t do any other thing on their phones apart from making and receiving calls. I know many people, who cannot even check their messages.

“That means I have to physically visit my bank on Monday to send the money I’m owing people”, a vulcanizer in the Ijaiye-Ojokoro area of Lagos, Idris Adegoke, stated.

BH findings revealed that the USSD service is preferred choice of millions of Nigerians owing to several reasons.

For instance, customers can complete transactions like fund transfers, checking of bank details and account balances, among others on their phones without buying data or having internet connections.

Also, it is more direct and easier to operate for non-literate Nigerians, unlike the online app, which is more rigorous with layers of security checks to navigate.

According to available data, over 70% of mobile transactions are done via USSD.

In their reactions, bank customers under the aegis of Bank Customers Association of Nigeria (BCAN), faulted the telcos for resorting to shutting down USSD services to resolve the logjam.

According to BCAN, telcos should consider reversing the suspension as the action will affect the banking public much more than the guilty banks.

“This shouldn’t have happened this way; unplugging the financial system from digital networks in the technology driven world of today is just not acceptable.

“The two industries have regulators, the Nigerian Communications Commission (NCC) for the telcos and the Central Bank of Nigeria (CBN) for the banks.

“The telcos should have relied on these regulators to address the disagreement instead of plunging the entire society into the monetary difficulties.

“There are also other arbitration channels they could have explored instead of a unilateral action.

“It was not necessary for them to have gone this far especially without notice, more so that their customers were also affected.

“The BCAN would have intervened to bring amicable settlement if we were consulted.

“I also expected the banks to communicate the customers and explain the challenges instead of leaving them in the dark, even more so that the customers would be thinking that the problem was from the banks”, BCAN’s President, Dr. Uju Ogubunka, stated.

She concluded by advising the two feuding parties to seek amicable resolutions of the dispute by submitting to arbitration by third parties.