New Airtime Decision Leaves Customers Stranded As Bank Transfers Fail

Following the widespread delays to Unstructured Supplementary Service Data (USSD) banking operations, millions of Nigerian bank clients are experiencing annoyance and confusion. Many of them are unable to complete transfers even if they have enough money in their accounts.

Information obtained by Saturday PUNCH shows that retail banking clients, dealers, and Point of Sale operators who mostly rely on USSD platforms for everyday financial transactions have complained about the disruptions, which have continued in recent days across a number of commercial banks.

According to our correspondent’s findings, the USSD payment ecosystem underwent a significant restructure, and financial and telecom regulators implemented stronger anti-fraud measures.

Since many consumers are unaware that successful USSD transactions now depend on both the availability of dollars in their bank accounts and the provision of airtime on their mobile lines, the development has revealed a crucial gap in public understanding.

Bank clients who visited commercial bank offices in Lagos expressed the confusion over recurring transaction failures.

When PunchNG correspondents visited First Bank, First City Monument Bank, United Bank for Africa, Access Bank, and Stanbic IBTC branches on Friday, customer service representatives took a long time to address complaints from clients who couldn’t send money via USSD codes.

Also, following failed transfer attempts, a number of clients at FCMB’s branch across from the Army Arena Shopping Complex in Oshodi asked for clarification.

Speaking on condition of anonymity because he was not permitted to comment on the issue publicly, a customer service representative at the branch clarified that the problem was primarily caused by modifications to the industry-wide billing framework rather than specific technical issues with individual banks.

The source had stated that the migration to a completely different billing structure is the reason some users are still experiencing difficulties.

Also, industry sources proclaimed that since the launch of USSD services, this shift is among the biggest adjustments to the nation’s digital banking architecture.

For several years, banks had taken transaction fees straight out of their clients’ bank accounts and then used intercorporate agreement processes to settle with telecom corporations. 

Regulators now refer to this arrangement as “End-User Billing,” in which consumers pay USSD session fees directly by deducting airtime from their mobile phone lines.

The new system in which every 120-second USSD session under the new system costs consumers N6.98, is taken straight from airtime rather than bank accounts.

The implication is important: regardless of the amount of money in their bank accounts, consumers with inadequate airtime are unable to execute USSD transactions.

A cashier at the Bolade branch of First Bank in Oshodi described the practical consequences of the new structure.

The official stated that even if a customer has millions of naira in the account, the USSD transaction will fail immediately if the SIM card linked to the bank account has zero airtime.

Users have grown accustomed to USSD transactions for years, which just required a registered mobile number and a sizable account balance. The new agreement essentially makes airtime availability a prerequisite for using mobile banking services.

A number of consumers who had reached out to Saturday PUNCH voiced dissatisfaction by expressing their displeasure about not receiving sufficient notice prior to the modifications.

Many claimed that the abrupt outages caused needless suffering, especially for those who rely on USSD services for regular financial transactions and live in places with poor internet connection.

Roadside point-of-sale (POS) operators and thousands of small enterprises that rely on quick transfers for client service are also impacted by the outage.

A customer named simply Alabi described his experience at the UBA Charity branch along the Mile 2 Expressway following several unsuccessful attempts to transfer money using USSD codes.

Alabi stated that for the past three days he has been experiencing challenges with the bank’s USSD service, as he has not been able to transact conveniently.

“The authorities, including the Central Bank of Nigeria and telecommunications companies, must act immediately to prevent this situation from seriously harming businesses.”

The impact is most noticeable in the nation’s unofficial financial system, where a lot of transactions are made using mobile banking services as opposed to traditional banking channels.

Aderonke Adebayo, who also happened to be a POS operator, told members of the press that unsuccessful transfers are becoming a common complaint from clients.

She further stated that at the time the press team was with her yesterday, only three clients had already complained to her about the failure of their USSD codes, and there was nothing she could do, so she had to ask them to get in touch with their banks.

Operators claim that unsuccessful transactions frequently lead to missed payments, lost business opportunities, and heightened hostility between clients and service providers in general.

In addition, some operators are concerned that protracted delays may destroy or weaken public trust in digital payment channels, which are now crucial to the nation’s economy.

The switch to end-user billing coincides with more significant developments that impact digital financial services.

With a 7.5% value-added tax on digital service fees, including USSD fees and some electronic transfer fees, that was recently imposed by the federal government.

Some customers worry that the cumulative effect of several charges could raise the cost of banking transactions, even though authorities have made it clear that the VAT only applies to service costs and not to the underlying amount being transferred.

For example, the tax is applied on the N6.98 USSD session charge instead of the actual amount of money being transferred.

Simultaneously, the Central Bank of Nigeria has eliminated a number of conventional banking fees, such as certain SMS alert deductions and card maintenance fees. 

Industry observers think that instead of using traditional account-related fees, authorities want banks to make up for it with more effective digital service delivery.

Consumers, on the other hand, contend that the ongoing disruptions run the risk of eroding the advantages that the reforms are supposed to provide.

Also, industry sources claim that in addition to billing reforms, certain service disruptions might also be related to stricter security measures put in place to counteract an increase in identity theft and electronic fraud.

In an effort to improve cooperation between the banking and telecoms industries, the Nigerian Communications Commission and the Central Bank of Nigeria recently signed a Memorandum of Understanding.

The agreement focuses on enhancing the integrity of digital payment systems, safeguarding consumers, and combating SIM-related fraud. 

Regulators recently launched a Telecom Identity Risk Management Portal to let banks verify SIM status, such as recent swaps or flags, before approving transactions, which then helps to prevent fraud. 

The Nigeria Inter-Bank Settlement System also now limits phone number changes linked to BVNs to just once per lifetime. These steps come as fraudsters increasingly exploit SIM swaps and identity theft. Meanwhile, banks and telcos recently resolved a nearly N300 billion dispute over unpaid USSD charges, which had become a major systemic risk.

To avoid the risk of being stranded, USSD users are advised to switch to mobile banking apps or internet portals, also known to be internet banking portals, for the banks that they transact with, which run on data and bypass USSD fees. If any user relies heavily on USSD, keep pre-loaded airtime on your SIM specifically for session charges. Also, know the 30-second refund rule, If buying airtime through your bank fails but debits your account, banks and network operators must automatically refund you within a 30-second time frame.

Alternatively, customers can also switch to the use of their bank card to make seamless transactions with the user of the bank’s ATM terminals for transaction purposes.