NCC to reveal defaulting banks in ₦200bn USSD debt this week
The Nigerian Communications Commission (NCC) will this week publicly release the names of 18 banks that have failed to settle their outstanding debts for using Mobile Network Operators’ Unstructured Supplementary Service Data (USSD) platforms.
These banks collectively owe a total of ₦200bn, and the telecom regulator is preparing to take action, including suspending USSD services for the defaulters.
Industry sources revealed that only four banks have met the payment requirements outlined in a joint directive issued by the Central Bank of Nigeria (CBN) and the NCC in December 2023.
The directive stipulated that 60% of pre-API (Application Programming Interfaces) invoices must be settled by January 2, 2025, with payment plans to be agreed upon by the banks and MNOs. However, the remaining banks have yet to fulfill their payment obligations.
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Pre-API invoices refer to outstanding payments for USSD services incurred before the implementation of APIs in February 2022. Prior to the adoption of APIs, USSD transactions were managed using older methods, which sometimes led to disputes over billing and reconciliation between banks and telecom companies.
The service suspension, expected to take effect in two weeks, could significantly affect Nigerians who rely on USSD services for banking transactions, particularly those without internet access. In its public statement, the NCC will direct affected subscribers on how to switch to other banks to ensure continued access to banking services without disruption.
The NCC’s move to expose defaulters is part of its ongoing effort to resolve the long-standing debt dispute between banks and telecom companies, a contentious issue for several years. Telecom operators have expressed concerns about the impact of the unpaid debt on the sustainability of USSD services, even threatening to withdraw the service.
Sources say banks have been reluctant to prioritize payments, while MNOs have held off on their threats of suspending services due to the critical role USSD plays in the economy.
Data from the CBN’s electronic payment statistics shows that between January and June 2024, 252.06 million transactions worth ₦2.19tn were carried out via USSD. This represents a significant increase compared to the full-year data for 2023, which saw ₦4.84tn transacted via USSD codes across 630.6 million transactions.
Originally developed by telcos for airtime and subscription services, USSD has been widely adopted in the banking sector due to its accessibility without internet connectivity.
In November, the Chairman of the Association of Licensed Telecom Operators of Nigeria, Gbenga Adebayo, noted progress in the repayment of the debt, with smaller banks beginning to settle their obligations. However, tier-one banks, which owe the most, have yet to make substantial payments.
“We are seeing payments from smaller players, but the big banks, which owe the most, have not been forthcoming,” Adebayo said. “We are now waiting for intervention from regulators, including the CBN and NCC, to resolve the issue.”
In October, Ejike Onyeaso, Director at Adaba Consult, expressed frustration with banks over inadequate payments for leased lines used for services like USSD.
He emphasized that since banks generate revenue through these services, they should compensate telecom firms. Onyeaso also warned that if telecom providers act on their threats to suspend services, it could disrupt banking operations.
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