Uncertainty as banks disconnect MTN subscribers from USSD channels
Hard times await millions of telecommunication subscribers in Nigerians who rely on Unstructured Supplementary Service Data (USSD) for banking transactions and payment of certain bills,
USSD is a second generation (2G) technology of Global System for Mobile Communications (GSM) protocol used to send text messages.
USSD is similar to Short Message Service (SMS) and millions of Nigerians, especially those using Feature Phones, leverage on this service to conduct payments and pay other bills.
However, an impeccable source revealed that commercial banks have started barring these subscribers from using USSD; which the source believes is a plot to withdraw from the agreement to offset the N42billion debts they owe the telcos.
The banks have started barring telecom subscribers from using USSD services; they have started with MTN subscribers. NCC really needs to step in fast because many subscribers would be wondering why they couldn’t perform the normal banking transactions using USSD platforms. You know that MTN has the largest subscriber base. So, if they succumb to this pressure others may follow. The banks actually want the telcos to forego the N42 billion debts they incurred using their networks for USSD services over the years and this has huge implications.
Apart from limiting financial inclusion, we should not forget in a hurry how Etisalat exited the Nigerian telecommunications industry. If this is allowed to continue it will further sabotage the Foreign Direct Investment (FDI) drives of the Federal Government of Nigeria. You can’t use a business’ platform and refuse to fulfill you part of the bargain. ”, the source who preferred to remain anonymous asserted.
The banks are willing to cut off services to customers in order to protect profits. The telcos have allowed debts of N42 billion to accrue to ensure services remain up.
Banks have tried to remove the cost of using USSD, but are willing to cut off subscribers to protect their own fees earned through the channel.
“This only has to do with preservation of bank profits, which are already substantial and growing despite the wider economic conditions”, the source said.
Industry analysts have also noted that within the last four years+, the commercial banks in Nigeria have reported increased turnovers/earnings Year-On-Year as shown below:
2017 – N148b/N8b 5.5%;
2018 – N240b/N13b 5.5%;
2019 – N320b/N14b 4.5%;
2020 – N470b/N18b 4%;
2021 – Projected N652b/N20b 4% Q1 & 2.5%
“The government needs to step in and deal with this once and for all. Nigerian banks need to stop their tyrannical posture.
“Note that with their action, the banks are denying customers from accessing their money to make legitimate purchases/transactions. As far as I am concerned MTN has not told us they are disconnecting USSD service offerings to the banks. So, why are the banks behaving this way?
Therefore, it will not be wrong to say the banks are focused on bullying everyone to maximize their revenues. The banks did not send a formal communication to customers or to the Nigerian Communications Commission (NCC) that was party to the peace brokered between telcos and the banks. But I doubt if the Central Bank of Nigeria (CBN) is not aware of this!
“The simple truth is that they don’t want to pay the N42 billion debts to the telcos; they don’t want to pay! Rather, they want to surreptitiously factor it into a new price regime so that customers will unknowingly help them pay what they had already billed them. Of course telcos refused, which is why they are fighting them now.
As it stands, the subscribers who have been cut-off from these services may wait till after Easter Holidays to know their fate. And as MTN subscribers are groaning, who knows the next telco the banks are targeting?