The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have expressed concern over the long-running dispute between Deposit Money Banks (DMBs) and Mobile Network Operators (MNOs) regarding the use of USSD platforms for banking services. Despite significant efforts, the dispute remains unresolved, prompting a new set of directives aimed at addressing the issue.
In a second joint circular, signed by Oladimeji Yisa Taiwo, Acting Director of the CBN Payment Systems Management Department, and Chizua White, Head of Legal and Regulatory Services at the NCC, the regulators provided a framework to resolve the issue of USSD debt.
According to them, DMBs are mandated to settle 85 percent of all outstanding invoices issued after the implementation of application programming interfaces (APIs) by December 31, 2024.
Additionally, all future invoices must also be settled at 85 percent within one month of being issued.
Banks must pay 60 percent of invoices prior to API implementation as full and final settlement.
Payment plans, whether lump sum or installment plans, must be finalized between DMBs and MNOs by January 2, 2025.
When installment payments are proposed, such plans must consist of equal monthly payments, with all payments completed by July 2, 2025.
Transition to End User Billing (EUB)
Compliance with the aforementioned directives is a prerequisite for the transition to an end-user billing (EUB) system. The NCC will activate the necessary regulatory processes to enable this transition and provide public guidance in this regard.
Part of the guide includes the following. To ensure fairness in billing, MNOs should adopt the rule that any USSD session lasting less than 10 seconds will not be billable.
Migration for prepaid billing DMB
Banks currently operating with prepaid billing can transition to EUB after meeting all regulatory requirements. Discontinuation of litigation Both the DMBs and MNOs have been instructed to suspend any ongoing legal proceedings related to the USSD debt dispute,” it reads in part.
The circular stressed that failure to comply with these directives would attract regulatory sanctions from both the CBN and the NCC.
The USSD debt issue arose from allegations that some banks were deducting N6.98 USSD fees from customers but not remitting the funds to telecom operators. Instead, the banks allegedly used these funds to meet other financial obligations.
As a result, the telcos, under the directive of the NCC, threatened to disconnect nine banks from USSD services by January 27, 2025, if they did not clear outstanding debts. The affected banks include Fidelity Bank, First City Monument Bank (FCMB), Jaiz Bank, Polaris Bank, Sterling Bank, United Bank for Africa (UBA), Unity Bank, Wema Bank and Zenith Bank. Collectively, their debts are estimated to be over N160 billion.
The NCC issued a notice emphasizing its commitment to consumer protection and warned customers about the possible loss of USSD services with these banks if debts remain unpaid. “As part of its commitment to consumer protection, the Commission wants to inform consumers that they may lose access to the USSD services of the affected banks from January 27, 2025,” the NCC said.
Earlier, telecom operators threatened to suspend USSD services of 18 banks due to unpaid bills totaling over N200 billion. However, the recent directives signal a renewed effort to resolve the logjam and ensure that consumers continue to enjoy uninterrupted USSD services.
The CBN and NCC aim to resolve the USSD debt issue through the measures outlined, ensuring a balance between the interests of telecom operators, banks and consumers. A key element of this resolution is the change to an end-user billing system, which will streamline the payment process and minimize disputes.
In addition to the financial directives, the circular encourages collaboration between banks and telecom operators to implement these measures effectively. He also ordered both sides to ensure prompt and transparent communication to avoid further misunderstandings.
For customers, resolving this issue is critical to maintaining uninterrupted access to USSD services, which are essential for mobile banking transactions. Adoption of the “10 Second Rule” is expected to reduce disputes over unfair billing and improve consumer confidence.
As part of the regulatory process, the NCC and CBN will provide public guidance on the transition to the new billing system. This step is expected to encourage a smoother shift towards end-user billing while ensuring consumers are adequately informed.
The CBN and NCC's ongoing efforts to address the USSD debt dispute reflect a commitment to safeguarding consumer interests and maintaining stability in Nigeria's financial and telecommunications sectors. By enforcing these directives, regulators aim to resolve the debt crisis, ensure fair practices and support the continued growth of digital financial services in the country.
While challenges remain, the outlined resolutions provide a clear path forward, emphasizing accountability, transparency and collaboration among all stakeholders. The next steps will determine the success of this initiative and its impact on the broader financial ecosystem.