The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have issued a directive requiring banks to pay $275 million, representing 85% of a $324 million debt owed to telecom operators for Unstructured Supplementary Service Data (USSD) charges, by December 31, 2024.
This move, outlined in a memo dated December 20, 2024, follows years of contentious delays and disputes over USSD payments. The debt, which has accumulated since 2021, stems from a regulatory mandate that tasked banks with collecting and remitting USSD fees. However, many banks have resisted, claiming that the fees are excessive and that USSD technology is outdated.
Segun Agbaje, CEO of GTCO, voiced concerns over the current model, saying, “If you want to charge $0.03 for the service, go ahead. But collect it yourself. Don’t come to us.” Similar sentiments were expressed by the late Herbert Wigwe, who questioned the telecom operators’ fee structure and predicted the obsolescence of USSD technology.
As of November 2024, telecom operators assert that banks owe $324 million for USSD services, with the December 20 directive aiming to expedite the settlement process and enforce stricter payment timelines. Key provisions of the mandate include a requirement for banks to pay 85% of new invoices within one month of receipt, and an agreement by January 2, 2025, to settle 60% of all outstanding invoices before using any telecom operator’s USSD platform.
Failure to comply will result in penalties, including fines, operational restrictions, or other regulatory actions.
Additionally, the memo outlines incentives for banks to meet payment milestones. If banks comply, the NCC will transition to an end-user billing (EUB) model, where customers, rather than banks, will directly pay for USSD services—a solution long considered a potential resolution to the ongoing payment dispute.
The December 20 directive represents a significant effort to resolve the long-standing USSD payment issue. While the adoption of the EUB model may offer a long-term solution, the immediate focus is on ensuring compliance to clear the existing debt and restore stability in the relationship between banks and telecom operators. As the December 31 deadline approaches, all eyes will be on the banks to fulfill their obligations and on regulators to enforce the new measures.