Banks Avoid Losing Business by Clearing USSD Overdue Debt

As banks made great strides in paying off their outstanding debts, Nigeria’s telecom carriers have maintained Unstructured Supplementary Service Data services, averting a possible disruption that may have affected millions of subscribers.

The banks have made significant strides in paying off their debts, which put them in danger of being disconnected because of a N160 billion debt. This would guarantee that consumers without internet access may continue to use the USSD platform.

The Nigerian Communications Commission threatened to disconnect nine banks from USSD services by January 27 if they did not pay off arrears accrued since 2019 in a notification dated January 15, 2024. To prevent service interruptions, the banks took prompt action to address the problem.

At a CEO meeting in Lagos, Gbenga Adebayo, the chairman of the Association of Licensed Telecommunications Operators of Nigeria, Nigerians rely on USSD as a payment gateway, and its deactivation would have prevented them from accessing vital financial services and affirmed that the situation had been defused.

The Nigerian Communications Commission (NCC) said in a notification on January 15 that it will terminate nine banks’ access to USSD by January 27 due to their failure to pay off USSD accrued since 2019.

Thanks to the regulators, money has been paid and we are moving forward,” he stated that nearly all of the nine banks that were targeted for termination of their Unstructured Supplementary Service Data (USSD) service due to a debt of N160 billion have made considerable progress toward recovery, and there is assurance that none of them would be deprived of USSD services. The banks Fidelity Bank Plc (770), First City Monument Bank(329), Jaiz Bank Plc (773), Polaris Bank Limited (833), Sterling Bank Limited (833), United Bank for Africa Plc (919), Unity Bank Plc (7799), Wema Bank Plc (945), and Zenith Bank Plc (966) are the nine banks that would have been impacted by the NCC’s notice of disconnection.

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) chairman, Mr. Gbenga Adebayo, said over the weekend that the situation has been de-escalated. Thanks to the regulators, money has been paid and we are moving on.

The Chief Executive Officer of MTN Nigeria, Mr. Karl Toriola, stated earlier this week that banks and telecoms had settled their disagreements. “Thanks to the brilliant move by the Central Bank of Nigeria and NCC, the USSD debt issue has been resolved.”

Users can transmit orders and brief messages to the computers of their mobile network provider using the USSD communication protocol. “Feature codes” and “quick codes” are other names for USSD.

When banks began to incur fees for utilizing USSD services offered by telecom carriers in 2019, the argument got underway. But because many banks found it difficult to pay the penalties, the debt grew.

The CBN and the NCC ordered banks to pay a portion of the USSD debt owing to telecoms since commercial banks have been unable to resolve a payment dispute with telcos over USSD infrastructure since 2019. The team sent a document on December 20, 2024, outlining a structured payment schedule, of which this enforcement is the first stage.

Eighty-five percent of all outstanding invoices (from February 2022) must be paid by December 31, 2024, according to the document issued by the CBN and the NCC on December 20. Nine out of the 18 banks that owed the telecoms money paid down more than 90% of their debt, according to the NCC.

With dates for each step, the document outlines a three-phase payment responsibility for banks to satisfy the N250 billion debt.

By January 2, 2025, banks must settle 60% of all outstanding pre-API invoices as part of the first phase. 

All pre-API invoices must be fully paid by July 2, 2025, according to the second phase. Lastly, by December 31, 2025, banks must clear 85% of post-API bills as part of the third phase.