USSD Codes to Become Inactive as MTN, Airtel, Other Telcos Disconnect 18 Banks
-
Loading... - Princewill Okocha
- 14 Jan 2025
- 44 Views
- 0 Like
- 0 Comment
Telecommunication operators in Nigeria have announced plans to disconnect the Unstructured Supplementary Service Data (USSD) services of banks within two weeks due to an outstanding debt exceeding N250 billion. This decision poses a significant threat to USSD transactions, which the Central Bank of Nigeria (CBN) valued at N1.19 trillion from 252.06 million transactions recorded in the first half of 2024.
The impending disconnection is expected to impact bank customers significantly, as USSD transactions have become a vital tool for financial inclusion, particularly for those in areas with limited internet access. Initially designed to cater to users of feature phones, the reliance on USSD has grown, especially as digital banking services have expanded. The suspension of USSD services could hinder Nigeria's efforts to enhance financial inclusion, as many customers depend on this method for money transfers without needing internet connectivity.
The suspension is set to take effect in two weeks, following the banks' failure to comply with a joint directive issued by the CBN and the Nigerian Communications Commission (NCC) on December 20, 2024. This directive required financial institutions to pay a portion of the N250 billion debt by December 31, 2024. Reports indicate that the USSD services of 18 banks may already have been suspended, with more disconnections anticipated if the banks do not take immediate action to settle their debts.
According to a report by BusinessDay, the NCC has confirmed that the suspension was approved and that a formal statement will be issued soon. The two-week notice period is intended to give subscribers time to prepare for the potential disconnection. Sources within the NCC have indicated that if the banks do not make a serious attempt to pay their debts, their USSD services will be deactivated. While four banks have reportedly made payments, the NCC plans to provide further updates on January 14, 2025.
The ongoing USSD debt has persisted for six years, and many bank customers rely on this service for transactions. Experts warn that the imminent suspension could significantly disrupt the banking community. As of July last year, the number of active bank accounts in Nigeria reached 231.1 million, up from 151 million in 2022, with a substantial portion of these accounts utilizing USSD for transactions.
However, data from the CBN indicates a decline in USSD transactions, with total transactions amounting to N2.19 trillion in the first half of 2024, a 54.75% decrease from N4.84 trillion during the same period in 2023. The volume of transactions also dropped to 252.06 million from 630.6 million in the previous year.
The relationship between banking and telecom operators has been strained due to disagreements over payment methods, prompting regulatory interventions. Banks are charged N6.98 for each USSD transaction, which they are expected to remit to the telecom operators.
In summary, the potential disconnection of USSD services for 18 banks poses a significant challenge to Nigeria's banking sector and its efforts toward financial inclusion. As the situation develops, the impact on customers and the broader financial landscape remains to be seen.
