*Nigerian telecoms stakeholders say settlement of a substantial portion of N180 billion outstanding USSD debts banks owed the Mobile Network Operators will accelerate implementation of the new end-user billing structure for USSD transactions in the country

Gbenga Kayode | 绿帽献妻

As Nigerian Deposit Money Banks (DMBs) prepare to fine-tune and activate modalities for migrating to the new End-User Billing model, telecoms operators have confirmed that Financial institutions paid over 95 percent of N180 billion outstanding Unstructured Supplementary Service Data (USSD) debts.

USSD, commonly known as 鈥榖ank transfers鈥�, is done through short codes on telecoms consumers鈥� mobile phones.

绿帽献妻 reports the leadership of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) disclosed this development during a virtual forum recently.

Engr. Gbenga Adebayo, Chairman of ALTON

Industry observers also said the banks鈥� settlement of a substantial portion of the long-standing USSD debts owed the Mobile Network Operators (MNOs) would accelerate implementation of the fresh, streamlined billing structure on deductions for USSD transaction charges directly from telecoms consumers’ airtime.

The Nigerian Communications Commission (NCC) recently directed the West African country鈥檚 commercial banks to commence further deductions of USSD charges from their customers’ airtime balances.

The telecoms sector regulatory Commission specifically, directed the banks to stop deducting charges for USSD transactions from customers鈥� accounts, and henceforth, deduct such charges from users鈥� mobile airtime.

It is noted that since 2021, collaborative efforts between the telecoms and banking sectors, supported by both the Federal Ministry of Communications and Digital Economy as it was then called, the NCC, and the Central Bank of Nigeria (CBN) as their regulators, have aimed to standardise charges for USSD banking transactions.

The effort has resulted in arriving at a unified fee of N6.98 per transaction.

Resulting from this understanding between the banks and MNOs, the Telcos, including MTN Nigeria, Airtel, Globacom and 9Mobile, May 2025, however, threatened to withdraw network support for banks鈥� Unstructured Supplementary Services Data in the country.

The network operators had cited what they described as “gross misinformation of subscribers” on the new mode of deduction for USSD transaction fees.

Banks comply with NCC鈥檚 regulatory directive on new end-user billing system

Earlier, the banks had issued a notice to their customers, stating NCC had directed them to discontinue deducting charges for USSD transactions directly from customers鈥� accounts.

The financial institutions also said the operators would deduct charges from the USSD users鈥� mobile airtime balances.

The banks stated in part: 鈥淚n line with the directive of the Nigerian Communications Commission (NCC), please be informed that effective June 3, 2025, charges for USSD banking services will no longer be deducted from your bank account.

鈥淕oing forward, these charges will be deducted directly from your mobile airtime balance in accordance with the NCC鈥檚 End-User Billing (EUB) model.”

They noted: 鈥淯nder this new billing structure, each USSD session will attract a charge of ?6.98 per 120 seconds, which will be billed by your mobile network operator.

鈥淵ou will receive a consent prompt at the start of each session, and airtime will only be deducted upon your confirmation and availability of the bank to fulfil this service.

鈥淚f you do not wish to continue using USSD banking under this new model, you may choose to discontinue use of the USSD channel.鈥�

Reacting the to the banks’ claim, the Telcos under the auspices of ALTON, however, said the banks鈥� notice to their customers is a gross misinformation, deliberately hatched to suit their selfish interests. Hence, the MNOs threatened to withdraw network support to the banks鈥� USSD services.

ALTON: There鈥檚 substantial progress in resolving long-standing USSD debts

On the latest development while speaking of the settlement of the USSD debts owed the MNOs during the 鈥楢SK the Exec鈥� virtual session, hosted by MTN Nigeria Communications Plc, Engr. Gbenga Adebayo, Chairman of ALTON, however, affirmed that 13 banks have fully paid their USSD debts.

The ALTON Chairman disclosed the three remaining debtor banks were inching closer to completion of their payments as well.

Adebayo further stated that the three financial institutions had cleared over 95 percent of their respective USSD debts, too.

Following the resolution of the long-run crisis of confidence over the payment of the USSD debts between the network providers and the banks, charges for these services henceforth, will be debited directly from bank customers鈥� airtime accounts.

The recent ‘ASK the Exec鈥� online meeting of the industry stakeholders, including Lynda Saint-Nwafor, Chief Enterprise Business Officer at MTN, also discussed the update on debt settlements, and the upcoming billing model in the banking cum telecoms ecosystems.

The ALTON Chairman also averred there has been substantial progress in resolving the long-standing debt issue between the banks and MNOs in Nigeria.

Adebayo further explained to reporters at the virtual session: 鈥淎s of January, the outstanding debt from banks to MNOs for USSD services was N180 billion.

“Of the 17 banks with pre-API outstanding payments (excluding Heritage Bank, which is insolvent), 13 have fully settled their debts, and the remaining three are in the final stages of installment payments, with over 95% of the debt cleared.鈥�

He equally stated: “This significant clearance of historical debt is crucial as the industry moves to a new operational model.

鈥淏anks with outstanding debts will not be excluded from the new system; they can either migrate to end-user billing, once their debts are cleared or choose to remain on the old corporate billing model, provided they settle their outstanding obligations.鈥�

Why the new EUB model for bank customers, by MTN Nigeria

In her contributions to the discourse, Saint-Nwafor, Chief Enterprise Business Officer at MTN Nigeria, shed mire light on the upcoming change in the new end-user billing model for bank customers in regard to USSD charges.

She said: 鈥淭he most significant change is the transition to end-user billing, where customers will now be billed for USSD transactions directly from their airtime accounts instead of their bank accounts.

“This means deductions will no longer occur from bank balances but from airtime balances held with MNOs.鈥�

Hitherto, Nigerian banks had directly debited customers鈥� bank accounts, a system that presented challenges regarding transparency and control, according to report.

Highlights of 鈥榮tandardised process鈥� for end-user billing model

In a move to address identified challenges in the old billing model, stakeholders have developed the Application Programming Interface (API), granting banks full control over their USSD channels.

For instance, a bank like GTBank with the USSD code *737# can now ensure a customer鈥檚 number is accepted by the bank before a transaction proceeds, after which the bank applies the N6.98 charge.

MNOs like MTN simply facilitate the connection, earning their N6.98 fee for providing the channel.

To ensure a smooth transition and consistent experience, a standardised process for end-user billing has been implemented across all operators and banks:

Consent Message: Customers dialling a bank鈥檚 USSD code will receive a clear consent message informing them of the N6.98 deduction from their airtime and requesting acceptance.

Aggregator Communication: Upon acceptance, the MNO will contact a USSD aggregator to confirm the bank鈥檚 availability, preventing billing for unfulfilled services.

Transaction and Billing: Once the bank confirms readiness, the MNO connects the customer and bills the airtime account.

All MNOs have also unified their messaging to customers, providing consistent communication on service levels and transaction outcomes, clarifying if a transaction failed due to issues on the bank鈥檚 end or the telco鈥檚 side.

Crucially, Telco service purchases (airtime and data) from banks are zero-rated when customers use direct strings (e.g., dialing 73710000# for N10,000 airtime instead of the generic *737#).

This informs both the MNO and the bank of the specific intent, making these transactions free. Customers are strongly encouraged to use these direct strings to avoid charges, and extensive communication campaigns are planned.

It is said that any instance of double deductions (from both airtime and bank accounts) should be reported to the customer鈥檚 bank.

Explaining the application of the new end-user billing model in the ecosystem, Engr. Adebayo, who answered several questions on the programme, reassured Nigerians about the implications for consumers and businesses.

Concerning consumers. he explained the mandatory shift to end-user billing has a zero net effect on cost, as bank customers were already paying the N6.98 fee, albeit from their bank accounts.

According to him, transparency and accountability are enhanced through standardised consent messages, inter-industry agreements, and MNOs鈥� commitment to providing monthly performance statistics to regulators, including the NCC and CBN.

Adebayo stated: 鈥淚f a transaction fails due to MNO network issues, the customer will not be billed, or any deduction will be reversed.

“However, if the failure originates from the bank鈥檚 end (e.g., insufficient bank balance, bank system downtime), the customer will still be billed, with the reason for failure communicated.鈥�

In regard to USSD usage limiting access for those in unbanked areas or without airtime in the West African country, Adebayo said: 鈥淭he N6.98 charge is considerably lower than alternative transport costs to physical banking points.

“Furthermore, customers can purchase airtime from their bank accounts at zero cost, using direct strings, even if they have no airtime, as long as they have funds in their bank accounts.”

The Chairman of ALTON added: “USSD is seen as a convenience channel, with all stakeholders contributing to the cost of providing financial services.”

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