Planned withdrawal of Unstructured Supplementary Service Data (USSD) short code service that enables bank transfer from mobile device, has been suspended by telecommunications operators in the country.
The withdrawal of the said suspension of service, which was to take effect from Monday, March 15, came as the Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) announced that bank customers would begin to pay N6.98 kobo per USSD transaction as against N4.
The telco’s decision to suspend the USSD bank transfer service was justified by the failure of banks and other financial service providers to remit the sum of N42 billion debts incurred by banks in the last eight months through the use of the service.
But at a meeting of stakeholders on Monday evening in Abuja by the Minister of Communications and Digital Economy, Dr. Isa Pantami, the telcos agreed to suspend service withdrawal.
All parties at the meeting on Monday agreed that effective March 16, USSD services for financial transactions conducted at DMBs and all Central Bank of Nigeria (CBN) licensed institutions would be charged at a flat rate of N6.98 per transaction. The agreed new price regime now replaces the current N4 per session billing.
The Acting Director, Corporate Communications, Central Bank of Nigeria (CBN), Osita Nwanisobi, and the Director of Public Affairs at NCC, Dr. Ikechukwu Adinde, said in a joint statement that the new approach will ensure transparency and same cost, regardless of number of sessions per transaction.
With the new USSD price structure, there is now a flat fee per USSD session however long or whatever the number of messages making up the session.
Before this new rate, a session usually last 20 seconds, meaning that for each session N4 is charged, even if the transaction is not completed or failed along the line. But in this new rate, 20 seconds session has been abolished, and no cost implication until a transaction is completed.
According to CBN’s Nwanisobi and NCC’s Adinde, the new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts. It pointed out that banks would not impose additional charges on customers for the use of USSD Channel.
On the N42 billion USSD service debt owed by banks, stakeholders came to terms on settlement plan for outstanding.
The statement restated DMBs and MNOs’ commitment to strategies that lower cost and enhance access to financial services.
“With the above resolutions, the impending suspension of DMBs from the USSD channel is hereby vacated. Therefore, DMBs shall no longer be disconnected from the USSD channel.
“The general public is hereby reminded that the USSD channel is optional, as several alternative channels such as mobile apps, Internet banking and ATMs may be used for financial transactions.
“The CBN and NCC shall continue to engage relevant operators and all stakeholders to promote cheaper, seamless access to mobile and financial services for all Nigerians,” the statement read.
A source at the meeting told The Guardian that the two sectors agreed on N1.63k price and N4.50 price cap while a flat fee of N6.98k will be for the transaction.
According to the source, banks will now charge customers for the USSD transaction done on their accounts and settle the telecom operators.
He said the two parties also agreed to work together to deepen and expand digital financial inclusion of the Federal Government and come out with modalities and strategies on USSD.
Stakeholders who attended the meeting included the Deputy Governor, Financial Systems Stability Central Bank Of Nigeria, Aisha Ahmad, who represented the CBN Governor, Godwin Emfiele; Access Bank Group MD, Herbert Wigwe, Chairman of the Committee of Bank CEOs; MTN Nigeria CEO, Karl Toriola; Airtel Nigeria CEO, Segun Ogunanya; 9mobile Executive Director, Abdulrahman Ado; the EVC of NCC, Prof. Umar Danbatta; and Executive Commission, Technical Services, NCC, Ubala Maska and among several banking and telecom stakeholders.