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The Nigerian Communications Commission (NCC) has announced that telecommunication firms may disconnect nine banks’ Unstructured Supplementary Service Data (USSD) services due to an unpaid debt of ₦160 billion.
In a notice issued on Wednesday, the NCC revealed that if a significant portion of the debt is not cleared, the telcos will suspend USSD services to the affected banks by Monday, January 27, 2025.
Banks Affected
The NCC listed the affected banks and their USSD codes as follows:
- Fidelity Bank Plc (770)
- First City Monument Bank (329)
- Jaiz Bank Plc (773)
- Polaris Bank Limited (833)
- Sterling Bank Limited (822)
- United Bank for Africa Plc (919)
- Unity Bank Plc (7799)
- Wema Bank Plc (945)
- Zenith Bank Plc (966)
The Commission warned that if the issue is not resolved, consumers may have challenges accessing these financial institutions’ USSD platforms.
Importance of USSD Services
USSD is a vital payment channel for millions of Nigerians, particularly those using feature phones. In a country with smartphone penetration rates of 59% in urban areas and only 26% in rural regions, USSD remains a critical tool for financial inclusion.
At the 20th anniversary of Nigeria’s telecoms sector in 2021, Ebenezer Onyeagwu, then Managing Director of Zenith Bank Plc, highlighted the transformative impact of USSD, stating, “The introduction of USSD changed everything. Without telecoms infrastructure, there is no USSD code.”
The service has enabled people in underserved areas to open bank accounts and perform financial transactions, contributing to the country’s financial inclusion rate, which reached 74% in 2023, according to EFInA.
Bolaji Akinboro, Chairman of Voriancorelli, emphasized the significance of USSD, calling it “a universal channel that grants access to financial services regardless of the type of phone used.”
Payment Disputes and Debt Reduction
Telcos have long pointed out that financial transactions drive 90% of USSD traffic. The GSMA, the global association for telcos, reported that nine out of ten mobile money transactions in Sub-Saharan Africa are conducted via USSD. This platform was especially crucial in addressing the economic challenges posed by the COVID-19 pandemic.
However, unresolved payment disputes between banks and telcos since 2019 threaten the continuity of this critical service. A joint directive issued by the Central Bank of Nigeria (CBN) and the NCC in December 2024 required banks to pay 85% of outstanding invoices from February 2022 by December 31, 2024.
The NCC disclosed that while nine of the 18 indebted banks cleared over 90% of their debts, the overall outstanding balance has only reduced from ₦200 billion to ₦160 billion.
“The failure of financial institutions to comply with the CBN-NCC joint circular also means they cannot meet the Good Standing requirements for renewing the USSD codes assigned to them by the Commission,” the NCC stated.
Implications for Financial Inclusion
The potential disconnection of USSD services could jeopardize access for millions of Nigerians, particularly those in rural areas and the unbanked population who rely on this service. As discussions between banks, telcos, and regulators continue, the future of USSD services in Nigeria hangs in the balance.
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