Nigerian's telecommunication companies and NIgerian's banks have come to a conclusion to deduct customers' airtime balance to pay for USSD charges. This bill was proposed by the Nigerian Communications Commission (NCC) to settle a multi-years disagreement between telecom operators and banks over who should be responsible for the cost of customers' USSD transactions.
The dispute, which has resulted in over ₦160 billion ($106.67 million) debts, has gotten a new development now. NCC has proposed a new guidelines that customers will be the one bearing the cost of their USSD banking charges. The change will begin before end June or early July. The ₦160 billion ($106.67 million) unpaid debt is still hanging in the balance with the question "who is going to pay"?
How The Billing Model Will Work
The new billing model works in the sense that mobile service operators will deduct cost for USSD services directly from customers' airtime balance. This deduction occurs only after two conditions are met:
- The customer will agree and accept the consent to the USSD transaction charges.
- Secondly, the bank will also confirm that it is prepared to provide the requested service.
The customers' consents and banks' readiness ensure that a transparent and consensual billing process is adopted. United Bank for Africa (UBA) and Sterling Bank are first to issue a notice to their customers regarding the new billing model.
In the notice they issued, they stated that each USSD code dialed attempts will cost ₦6.98 per 120 seconds. This incurred fee will be charged directly from the customer's airtime balance. This type of billing is usually referred to as End-User Billing.
In the first sense, telecoms and banks worked together to provide USSD services to banks' customers. They both agreed upon that banks will charge customers for the transactions through transaction charges and banks will forward the payment to telecoms via their linked backend services.
However, the plan didn't work out. Banks couldn't come up with a clear revenue-sharing plan whcih led to building up debts as USSD usage grew. In 2019, MTN Nigeria tried changed this billing plan because banks are owing them.
The telecom wanted to charge customers directly for every USSD sessions, but NCC and Central Bank of Nigeria (CBN) stopped the move.They said that USSD costs should not fall on customers.
In response to this, NCC proposed a corporate billing system that required banks to cover USSD costs while incurring for separate transaction charges from customers. Despite the NCC efforts, the debt disputes continued between the two sectors.
In 2021, a ₦6.98 flat fee per USSD session/attempt was imposed, with banks responsible for handling the collections it from customers and paying telecoms. Many banks failed to comply, leading to unpaid fees piling up once more.
By late 2024, telecommunication companies claimed that banks owed them ₦250 billion for USSD banking services. Meanwhile, CBN and NCC already ordered banks to pay ₦212.5 billion (85% of the debt) by year-end. And as of early 2025, MTN Nigeria confirmed that its had recovered ₦32 billion, remaining ₦42 billion debt still unpaid.
