Telcos issue disconnection notice to banks over ₦120 billion USSD debt

Telcos have notified banks in Nigeria of their intention to disconnect them from accessing their services following the ₦120 billion USSD debt.

The telecommunication companies have argued that the relationship with the Deposit Money Banks(DMOs) can no longer continue due to the bank’s failure to pay up the ₦120 billion owed to the telcos for using their Unstructured Supplementary Service Data, USSD infrastructure for financial services.

The use of USSD for financial services has become an integral part of the country’s race to financial inclusion as it targets a large number of Nigerians without access to internet facilities.

USSD short codes can enable transactions like fund transfers, checking of bank details and account balances using mobile phones without data or internet connections.

According to data from the Nigeria Inter-Bank Settlement Systems (NIBSS), the value of transfers via USSD in Nigeria has witnessed significant growth as it hit the ₦4.49 trillion mark in 2022.

Also, the data also shows that the volume of USSD transfers from January to December 2022 was 516,080,515.

With just about 44% of citizens with access to smartphones, shutting down the USSD services would pose a grave danger to the industry as the figures have confirmed the potential of USSD as a critical channel for electronic transactions.

While the major telcos involved, MTN, Glo, Airtel, and 9mobile have begun the process of issuing disconnection notices to banks, the chairman of the Association of Licensed Telecommunication Operators of Nigeria (ALTON) Gbenga Adebayo however, confirmed that there have been no disconnections yet that the first step was the disconnection notice sent to the banks.

The duration of this notice is dependent on the terms of the agreement with the operators. Disconnection is a function of if they respond with payment. If they respond with payment, we won’t see disconnections. If they don’t, we would start disconnections over the next days or weeks or months.” He said.

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