TELCOs Against Airtime Fees For Bank Transfers In The USSD Fight

USSD transaction fees are now being deducted from customers’ airtime by Nigerian banks

The Nigerian Communications Commission allegedly ordered Deposit Money Banks (DMBs) to take Unstructured Supplementary Service Data transaction fees straight out of customers’ airtime balances rather than their bank accounts. However, telecom operators who are members of the Association of Licensed Telecommunications Operators of Nigeria have denied these allegations.

Customers’ fears have grown as a result of notices from a number of banks, including Fidelity Bank, First City Monument Bank, and United Bank for Africa, stating that starting on June 3, 2025, USSD banking fees will no longer be subtracted from bank accounts but rather from airtime.

However, ALTON maintained that the telecom regulator did not issue such a mandate. The prerequisites for migration have not been met by the banks. The NCC has no supervision or authority over banks. 

Gbenga Adebayo, the chairman of ALTON, told The PUNCH that the Central Bank of Nigeria, not the NCC, should be the one to order the banks to move.

Although the telecom sector is theoretically prepared for end-user billing, the majority of lenders have not complied with crucial operational and regulatory requirements, such as paying off past-due bills and setting up error reporting and compensation systems.

“We are shocked that the banks used the most practical way to incite public anger by claiming that the NCC gave them instructions. The telecom executive stated, “NCC never said anything like that to the banks.”

“The answer is no, even if the banks say they have fulfilled the requirements for migration. Not all of them are prepared with the necessary procedures, and not all of them have met these requirements.

The transition to airtime billing can only occur after banks pay off outstanding debts to mobile network operators, per the joint circular released by the CBN and NCC on December 20, 2024, which was signed by Chizua Whyte, Head of Legal and Regulatory Services at the NCC, and Oladimeji Taiwo, acting Director of the CBN’s Payments System Management Department.

According to the memo, only banks and telcos that adhere to the payment terms will be able to switch to end-user billing.

The three stages of the payment plan are as follows: banks must settle all outstanding pre-existing bills by July 2, 2025, pay 60% of their old bills by January 2, 2025, and pay 85% of their new liabilities by December 31, 2025. 

According to information obtained by The PUNCH, the majority of commercial banks have not started deducting airtime from their clients’ accounts or sent out advisories.

Some banks’ sources acknowledged that they were either ignorant of the development or unsure on how to respond. Fidelity Bank, however, acknowledged that it had informed clients of the modification earlier.

“In accordance with the NCC’s directive, please be informed that charges for USSD banking services will no longer be deducted from your bank account as of June 3, 2025,” UBA wrote in a note to its customers. In line with the NCC’s End-User Billing approach, these fees will now be taken straight out of your cell airtime balance.

Additionally, UBA explained that the mobile network provider will now charge N6.98 per 120 seconds for each USSD session. 

“Each USSD session will cost N6.98 per 120 seconds, charged by your mobile network,” FCMB directive to its customers and subscribers via email. Before the charge is taken out of your airtime, you will be prompted to approve it. You can utilize other banking methods, such as ATMs, smartphone apps, or online banking, if you’d like.

Reactions from bank customers on X (previously Twitter) have been mixed. “Telecommunications companies won the battle for USSD charges,” Audu R.S. said. Because they will not benefit from USSD, banks are already subtly advising their clients to cease using it. I anticipate problems for USSD in the future. 

“Customers with zero or insufficient airtime balance will be unable to initiate any transaction,” noted Akinbobola Adumasi, another user, as a drawback of the new billing structure.

As banks may continue to extract fees from accounts without visibility of airtime charges, ALTON’s Chairman cautioned that an early move could lead to misunderstanding and multiple deductions.

“You will have a situation where carriers take airtime away and the banks still try to charge accounts if you let this go. Customers may become frustrated if error reporting and visibility procedures are not agreed upon, he said.

In the meanwhile, the authorities had also instructed telecom providers to follow the “10-second rule,” which states that USSD sessions that are shorter than 10 seconds shouldn’t be charged.

Since 2019, the dispute over USSD costs has continued, and in January 2024, the NCC threatened to disconnect nine banks for non-payment of obligations. Fidelity Bank, FCMB, Jaiz Bank, Sterling Bank, Polaris Bank, UBA, Unity Bank, Wema Bank, and Zenith Bank were among these financial institutions.

Adebayo had attested to the crises’ de-escalation at a CEO Forum in Lagos in February 2024, saying, “The matter has been de-escalated.” Thanks to the regulators, money has been paid and we are moving on.

In resolving the USSD debt scandal, the long-standing problem of USSD debt, which has been causing friction between telecom operators and commercial banks for years because the former frequently neglect to pay to the latter after taking from consumers’ accounts, has been resolved by this invention.

Mobile network operators (MNOs) and DMBs were instructed by the Central Bank of Nigeria (CBN) and the NCC in December 2024 to settle the long-standing N250 billion USSD debt.

The NCC threatened to terminate the USSD service and release a list of banks that still owed telcos in January after telcos threatened to stop providing services due to the debt that banks had accrued.

Due to outstanding debts, the regulator ordered telcos to deactivate the USSD codes linked to nine banks by January 27.

MTN Nigeria announced on February 28 that banks have paid N32 billion of the N72 billion owed for the USSD debt.