Key Highlights
- CBN explained that the current dispute between banks and Telcos over non-payment of accumulated USSD debt is due to technical issues regarding the definition of a successful transaction from their perspective.
- The apex bank said it is aware of the protracted dispute and has intervened.
- As part of measures to resolve the dispute, the direct billing model was proposed to enable telcos full visibility of USSD transactions
The Central Bank of Nigeria (CBN) has explained that the current dispute between the Deposit Money Bank (DMB) and telecom firms over the non-payment of Unstructured Supplementary Service Data (USSD) charges to service providers is due to technical issues regarding the definition of a successful transaction from a bank and telco perspective.
This is as the apex bank revealed that it has intervened in the current disagreement between the DMBs and telecom firms over non-payment for the provision of USSD to bank users by service providers.
This is coming a few days after these telecom firms withdrew their services to banks with a lot of inconvenience to customers who found it difficult to access online banking transactions that depend on the platform.
This disclosure is contained in a statement issued by the CBN Spokesperson, Dr. Isa Abdulmumin, who explained that the apex bank was on top of the situation, blaming the dispute on technical issues regarding the definition of a successful transaction from a bank and telco perspective.
CBN aware of protracted dispute
- Abdulmumin said, “The CBN is very much aware of the protracted dispute between the banks and telcos and has been engaging all stakeholders to ensure an amicable resolution.
- “Indeed, it was due to the direct intervention of the CBN (or CBN Governor) in March 2021 that a per session price of N6.98 (including settling any outstanding fees) was agreed upon between the banks and telcos.
- “As far as we are aware, since 2021, DMBs continue to collect the USSD fees and remit the same on behalf of the telcos based on that agreement.
- “We understand the latest dispute concerns technical issues regarding the definition of a successful transaction from a bank and telco perspective.’’
Banks, Telcos differ on successful transaction
The apex bank’s image maker explained that the USSD fees are charged by DMBs using an automated system that bills the customer for a successful transaction only after a banking service is consumed.
He stated further that for the telcos, a successful transaction happens once the customer has dialed the USSD short-code which may not lead to the consummation of a banking service.
- He said, “Whilst such truncated transactions are not registered on the DMBs collection platform and thus not billed to bank customers, telcos expect the DMBs to charge customers once the short-code is dialled, whether or not a financial transaction is consummated.’’
Direct billing method for Telcos
Giving a further explanation of the role of the CBN, Abdulmumin said,
- “At a recent meeting of the DMBs & Telco representatives chaired by the Governor of the CBN to resolve the issue, he acknowledged the telcos’ right to collect all legitimately earned fees due to them and to recover their cost.
- “Following the discussion, the direct billing model was proposed as a lasting solution to the issue. This would enable telcos full visibility of USSD transactions and allow them to charge their customers directly. The feasibility of the model is still being worked out by the relevant stakeholders.’’
He described the USSD as a critical channel leveraged primarily by the financially excluded, vulnerable and critical mass, saying the CBN remains committed to ensuring that the areas of contention related to the selection of telco charges for USSD are resolved in the interest of the financial system and overall economy.
What you should know
- Recall that a few days ago, telecom operators under the aegis of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), threatened to disconnect all bank customers currently using the USSD platform over accumulated debts which have risen to N120 billion.
- ALTON, in a statement released and signed by its chairman, Gbenga Adebayo, said the Nigerian Communications Commission (NCC), the telecoms industry regulator, had granted approval for Mobile Network Operators (MNOs) to the DMBs if they fail to pay the debt owed to operators for the USSD debt.
