It has been more than eight months since the NCC issued an updated pricing methodology for USSD services for financial transactions in Nigeria.
Starting March 15, the Association of Licensed Telecommunication Operators of Nigeria (ALTON) has threatened to stop providing Unstructured Supplementary Service Data (USSD) to financial service providers (FSPs).
ALTON announced this on Friday in a statement signed by Gbenga Adebayo, the company’s chairman, and Gbolahan Awonuga, the company’s head of operations.
The mobile network operators must disconnect FSPs from USSD networks before their massive debt was paid, according to the association, with the approval of the minister of communications and digital economy and the Nigerian Communications Commission (NCC).
ALTON declared on March 15 that its members would begin a staggered removal of USSD programs, beginning with the most important debtors within the FSPs.
Members had continued to provide USSD services because their primary concern was to ensure that millions of Nigerian customers had regular access to financial services through USSD infrastructure, according to the statement.
The statement read:
“The background to this problem was that in order to accelerate the adoption of financial services on USSD, the Financial Service Providers (FSPs) partnered with our members to zero-rate the USSD access to end-users, while they bore the cost for the provision of service. Based on this arrangement, the banks took on the responsibility of billing customers and paid our members for use of the USSD infrastructure from the service fees deducted from the customer’s bank account.
“Following the issuance of the USSD Pricing determination by the Nigerian Communications Commission (NCC) which resulted in a price review of USSD service by our members, the banks decided that they would no longer pay for USSD service delivered to their customers and requested our members to charge customers directly for use of the USSD channel.
“This billing methodology where the Financial Service Providers (FSPs) customer is directly charged USSD access fees by our members irrespective of the service charges that the bank may subsequently apply to the customers’ bank account is called “End-User Billing” which the banks specifically demanded that all our members implement. The banks, however, provided no assurances to our members that such service fees charged to customers’ bank accounts for access to bank services through the USSD channel would be discontinued post-implementation of end-user billing by our members.
“The removal of these service fees by the Financial Service Providers (FSPs) would have meant that if bank customers were charged only the USSD costs communicated by our members per USSD session, bank customers will be paying far less than what they are currently being charged by the Financial Service Providers (FSPs) which in some instances are as high as N50. Additionally, the banks and telcos will be applauded for collaborating towards the financial inclusion objectives of the Federal Government.
“It has been more than eight months since the NCC issued an updated pricing methodology for USSD services for financial transactions in Nigeria. The methodology explicitly restricts Mobile Network Operators (MNO’s) from charging the end-user for the services and mandates the banking sector to enter into negotiations to settle outstanding obligations and agree individual pricing mechanisms to be applied going forwards.”