Nigerian banks are considering passing USSD transaction costs to customers after telecom companies raised tariffs, citing inflation and operational expenses.
This move has sparked concerns over higher mobile banking costs, particularly for users without smartphones or internet access.
Telecom firms, under the aegis of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), recently adjusted their USSD pricing, affecting banks that rely on the service for financial transactions.
USSD (Unstructured Supplementary Service Data), according to experts is a platform that enables bank customers to transfer money digitally using their phones without requiring an internet connection. This SMS-based mobile banking service utilizes a USSD shortcode to provide access to various financial services, including money transfers, bill payments, and purchasing airtime.
USSD is particularly beneficial for users who do not have smartphones or internet access, as it allows them to conduct banking transactions using specific codes assigned to each bank.
According to industry sources, dome banks are now reviewing pricing models to offset increased costs. While banks had resisted direct USSD charges due to regulatory interventions, the latest tariff hike may leave them with no choice but to pass on the burden.
Consumer groups warn that higher USSD costs could hinder financial inclusion. Meanwhile, the Central Bank of Nigeria (CBN) has yet to intervene. Discussions on a sustainable pricing model continue, as customers brace for possible changes.
The long-standing dispute between banks and telecom operators over USSD debts remains unresolved, with banks currently owing telcos about ₦200 billion. Following a December 2024 joint directive, the Nigerian Communications Commission (NCC) has approved the disconnection of nine banks over unpaid debts if they fail to settle by January 27.
