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Home » Mobile Banking Transactions Under Threat As Telcos Begin Withdrawal Of USSD Services March 15
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Mobile Banking Transactions Under Threat As Telcos Begin Withdrawal Of USSD Services March 15

mmBy Rommy Imah13 March 2021No Comments4 Mins Read
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ALTON
Engr. Gbenga Adebayo, Chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON)
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The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has declared that effective Monday, March 15, 2021, its members will be initiating a phased process of withdrawal of USSD services, starting with the most significant debtors within the Financial Service Providers (FSPs).

USSD (Unstructured Supplementary Service Data) is a communications service controlled by mobile network operators, described as a critical piece of infrastructure used to provide mobile financial services on most phones, at low cost, and without requiring access to the user’s SIM card.

ALTON is the umbrella body of Licensed Telecommunications Service Providers including Network Operators, Infrastructure Companies and Value Added Services Providers.

ALTON said on Friday in a statement jointly signed by its Chairman, Engr. Gbenga Adebayo and Head of Operations, Gbolahan Awonuga that it deeply regrets that it has reached a point where the withdrawal of the services has become unavoidable.

It, however, said it remained committed to working closely with the relevant Ministries and regulators to resolve this issue as quickly as possible.

“To minimise the disruption to customers, and with the concurrence of the Honourable Minister of Communications and Digital Economy and the Nigerian Communications Commission (NCC), on the huge debt to the Network operators; Mobile Network Operators will disconnect debtor Financial Service Providers (FSPs) from USSD services until the huge debt is paid,” ALTON said.

While providing a background to this problem, ALTON recalled that in order to accelerate the adoption of financial services on USSD, the Financial Service Providers (FSPs) partnered with its members to zero-rate the USSD access to end-users, while they bore the cost for the provision of service.

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It said that it was based on this arrangement, that the banks took on the responsibility of billing customers and paid its members for use of the USSD infrastructure from the service fees deducted from the customer’s bank account.

According to ALTON, “Following the issuance of the USSD Pricing determination by the Nigerian Communications Commission (NCC) which resulted in a price review of USSD service by our members, the banks decided that they would no longer pay for USSD service delivered to their customers and requested our members to charge customers directly for use of the USSD channel.ALTON 8

“This billing methodology where the Financial Service Providers (FSPs) customer is directly charged USSD access fees by our members irrespective of the service charges that the bank may subsequently apply to the customers’ bank account is called “End-User Billing” which the banks specifically demanded that all our members implement.

“The banks, however, provided no assurances to our members that such service fees charged to customers’ bank accounts for access to bank services through the USSD channel would be discontinued post-implementation of end-user billing by our members.”

ALTON noted that the removal of these service fees by the Financial Service Providers (FSPs) would have meant that if bank customers were charged only the USSD costs communicated by its members per USSD session, bank customers will be paying far less than what they are currently being charged by the Financial Service Providers (FSPs) which in some instances are as high as N50.

It further stated that in addition, the banks and telcos will be applauded for collaborating towards the financial inclusion objectives of the Federal Government.

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“It has been more than eight (8) months since the Nigerian Communications Commission (NCC) issued an updated pricing methodology for USSD services for financial transactions in Nigeria.

“The methodology explicitly restricts Mobile Network Operators (MNO’s) from charging the end-user for the services and mandates the banking sector to enter into negotiations to settle outstanding obligations and agree individual pricing mechanisms to be applied going forwards.

“During this time, Mobile Network Operators (MNO’s) have continued to provide access to USSD infrastructure and our members have continued to pay all Bank charges and fees to access the Banking industries assets and customers, despite the fact that obligations due from banks to telecoms companies for USSD services have reached over N42B.

“ALTON members have continued to provide these services because our primary concern is that the millions of Nigerian customers who access financial services through our USSD infrastructure every day should be able to continue conducting their transactions.

“This was given greater importance when customers’ became further reliant on these services due to COVID movement restrictions.

“Unfortunately, as it has been impossible to agree on a structure for these payments with the banks that do not involve the end-user being asked to pay, the government has been forced to intervene to ensure that a sustainable cost-sharing solution is agreed, that does not disadvantage the consumer in the long-term,” ALTON further disclosed.

ALTON enjoined its subscribers to kindly explore alternative channels with their Banks while the withdrawal of the USSD service is in place.

#March 15 #Mobile Banking #USSD Services #Withdrawal ALTON Telcos Transactions
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Rommy Imah
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Rommy Imah is Founder/Editor of Digital Times Nigeria (www.digitaltimesng.com). He has been in active journalism in over two decades with a bias for technology and business reporting. He is particularly passionate about technology and how it can be used to transform human life, businesses and services.

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