Why banks disconnect MTN from USSD channel

By Victor Akindele

Bank customers who are MTN subscribers were on Friday thrown into confusion as the financial institutions disconnected the telecom operator from their Unstructured Supplementary Service Data (USSD) channel. This came as the row over payment for the USSD deepens between banks and the telecom operators.

With this development, MTN’s customers have been unable to carry out financial transactions through the USSD channels. MTN is the largest operator in Nigeria by subscriber number, hence, millions of Nigerian subscribers are affected by the banks’ action.

Investigations revealed that the banks did not send a formal communication to customers or to MTN before taking this action, hence many customers were shocked and confused that it was impossible to use their regular USSD channel. Many of the customers took to social media to express their frustration, lamenting that the banks are denying them from accessing their money to make legitimate purchases/transactions.

Industry sources who spoke with our correspondent said the banks took the action in order to protect their profits. “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,” one of the sources said.

The banks' action came barely a month after the telecom operators had threatened to disconnect them over N42 billion USSD charges debt, which the banks are yet to pay.  The disconnection was averted by the intervention of the Minister of Communications and Digital Economy, Dr. Isa Pantami, after he summoned a meeting with the two industries regulators, the Central Bank of Nigeria and the Nigerian Communications Commission (NCC).

However, according to one of the telecom industry sources, the telecom regulator has not been doing enough in protecting the operators, hence, the banks could take such action against a telco. “If our own regulator is as protective of us as the CBN is to banks, they won't be able to have this type of field day they are having,” the source said.

“The government needs to step in and deal with this once and for all. Nigerian banks need to stop their tyrannical posture,” he added.

Millions of bank customers in the country rely on the USSD codes, which ride on the telecoms infrastructure, for various financial transactions ranging from fund transfers, checking account balance, etc. However, with the disconnection of MTN, the use of this channel has become impossible for bank customers, who are also MTN subscribers.

Following the non-payment of the N42 billion USSD debt by banks, the Minister of Communications had in a letter referenced HMCDE/039/CBN/Vol.1, dated 3rd March 2021, and addressed to the Governor CBN Mr. Godwin Emefiele, reminded the apex bank’s boss of the objectives of the determination on USSD pricing issued by the NCCon 23rd July 2019 and amended on 24th July 2020.

According to the Minister, the determination was issued to address the lingering matter of the impasse in the rendering of USSD service to banks and other financial institutions by the mobile network operators, to among others prohibit the application of an end-user billing pricing model and restate the existing directive on corporate user billing.

“I wish to bring to your attention that it is disheartening that those noble objectives are not realisable. This is due to the fact that not only have commercial banks failed to abide by the terms of the USSD determination but also the lingering incidence of indebtedness to MNOs for the services they rendered persist. This situation is on the rise to the detriment of the MNOs and indeed the communications industry as a whole,” he said.


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