Business
Customers at receiving end as banks, telecoms operators squabble over USSD charges

- Expert asks CBN, NCC to resolve issue
BY KAZIE UKO
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has accused bank executives of making unfounded allegations against its members, regarding the now rested plans by operators to start charging customers for the Unstructured Supplementary Service Data (USSD) fee.
This is just as an expert in the Fintech business has asked both the Central Bank of Nigeria (CBN) and the Nigerian Communication Commission (NCC) to wade into the matter, with a view to resolving the disagreement, in the interest of the economy.
The association, in a letter to the Body of Banks’ Chief Executive Officers on Tuesday, disagreed with the position of the banks that the charges would lead to 450 per cent rise in tariff.
The telcos umbrella body further alleged that banks were the biggest beneficiaries of the USSD charges.
ALTON, in its letter, signed by the chairman, Gbenga Adebayo, claimed that rather than using the USSD platform to bank the unbanked, the banks were serving the banked population, optimising their operations and generating huge revenue with the USSD channel.
The USSD rate, according to the telcos’ body, ranges from N10 to N50 and the proposed N4.50 per 20 seconds charge by the telcos amounts to a minimum of 0.08 per cent and a maximum of 40 per cent of the total charges to customers.
“The above underscores the fact that the biggest beneficiaries in the USSD value chain are the banks and that the allegation of destroying the financial inclusion strides by our members are unfounded,” the letter stated.

NCC boss Umar Danbatta

CBN boss Emefiele
It further boasted: “It will be impossible to connect Automated Teller Machines and Point of Sale terminals across the length and breadth of Nigeria without our members’ dedication and support. In addition, the cashless policy drive and the instant payment solution of the financial sector would not have been possible without our members’ support.”
ALTON’s response also made reference to a September 16 letter by the Body of Bank’s CEOs, where telcos were asked to commence end-user billing as such aligned with the standard practice for USSD billing.
THE PUNCH reports that the letter signed by 13 banks said, “Customers using non-bank services already pay for the USSD sessions.” However, the bank executives had denied having any knowledge of the direct USSD access charge to customers on Monday, when news broke that MTN was going to start charging its customers for the USSD service.
But a Fintech expert who spoke to RELIABLESOURCENG.COM Wednesday on the issue which leaves customers at the receiving end, described the entire saga as dicey.
According to our source, who pleaded anonymity, neither the banks nor the telcos was in a position to impose such charge on customers.
“It is a regulatory issue and by that, I mean it should be a matter between the Central Bank of Nigeria (CBN) as regulator to deposit banks and the Nigerian Communication Commission (NCC), regulator to the telecoms companies.
“You can’t charge on transaction on your own, without recourse to the regulators. It should be a matter between the CBN and NCC. It’s not in their (banks and telecom operators) place to begin to put charges,” our source explained.
The source further explained that even though the transactions in question are banks’ transactions, they are carried through the telcos platforms and as such the telcos should be paid by the banks, rather than placing additional charge on the users of the USSD service or asking the telcos to charge customers directly.
Restating his claim on the matter, Adebayo in a phone conversation with THE PUNCH said banks stopped paying the cost for providing the USSD services two months ago and had directed telcos to devise ways to recover their money from subscribers.
He said the banks stated that they would no longer pay for the USSD service delivered to their customers, following the issuance of the USSD pricing determination by the Nigerian Communications Commission.
It was gathered that some telcos had initiated the end-user billing for the USSD transactions due to the suspension of corporate billing by the banks.
ALTON described the end-user billing, which the banks specifically demanded that its members should implement, as a billing methodology where the banks’ customers were directly charged the USSD access fees, irrespective of the service charges that the bank might have applied to the customers’ bank account.
He said, “Why will the banks charge customers and not share the cost with the operators and you don’t expect the operators to charge customers? Banks continue to take the money without giving anything to the operators.”
ALTON chairman said the end-user billing as advised by the bank CEOs would amount to double billing to bank customers.
“Given that the USSD channel has become an established and most preferred channel for the banks especially for the banked population, we state that asking the customer to pay for the USSD is akin to requesting a customer to pay a bank’s landlord access fees prior to gaining access to banking premises,” Adebayo added.
Meanwhile, the NCC in a public notice on Tuesday, ordered an immediate suspension of end-user billing for financial transactions though the USSD channel by all telecom operators.
The Director of Public Affairs at NCC, Dr Henry Nkemadu, said consumers already paid service charge to banks for financial transactions carried out through the USSD channels, and should include the cost of use of operators’ critical network resources.