The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have mandated banks to settle ₦212.5 billion, or 85% of the ₦250 billion debt owed to telecom operators for USSD charges. This directive, issued in a December 20 memo, marks a decisive step in resolving the long-standing payment dispute that has persisted for years.
Why USSD Payment Debt Settlement Is Crucial
USSD technology enables essential financial services like mobile banking and fund transfers, particularly in areas with limited internet access. However, despite its critical role, the growing debt owed by banks to telecom operators has hindered the system’s efficiency.
Since 2021, banks have been required to collect and remit USSD fees, yet many have resisted. Bank executives argue that the charges are unjust and that USSD is outdated technology. Segun Agbaje, CEO of GTCO, criticized the system, stating, “If you want to charge ₦20 for the service, go ahead. But collect it yourself.”
Key Directives for USSD Payment Debt Settlement
The December 20 memo introduces strict timelines to resolve the debt:
- 85% Payment by December 31, 2024: Banks must pay ₦212.5 billion by this date.
- Monthly Payment Deadlines: 85% of new invoices must be paid within one month of receipt.
- Long-Term Settlement Plan: By January 2, 2025, banks and telecom operators must agree on a plan to settle 60% of all outstanding invoices.
Failure to meet these deadlines will result in sanctions, including fines or operational restrictions.
Incentives for Compliance
Banks that meet payment milestones will benefit from a transition to End-user Billing (EUB). Under this system, customers will directly pay for USSD services, reducing the financial burden on banks. However, this option will only be available to compliant institutions.
Implications of the Debt Settlement
This directive aims to restore trust between banks and telecom operators while ensuring uninterrupted USSD services. For telecom operators, timely payments will enhance their operational capacity. For banks, compliance could lead to long-term solutions like EUB, ultimately reducing their financial liabilities.
As the December 31, 2024, deadline approaches, the success of this initiative will depend on the cooperation of all stakeholders. The resolution of the USSD payment debt settlement is crucial for sustaining Nigeria’s financial inclusion goals and ensuring reliable access to mobile banking services
The CBN and NCC’s directive for USSD payment debt settlement is a significant move toward resolving a persistent financial dispute. By enforcing payment deadlines and offering incentives, the regulators aim to establish a sustainable framework for USSD services in Nigeria. Compliance by all parties will not only address the current debt but also lay the groundwork for a more efficient and equitable payment system.
