NCC To Expose Defaulting Banks After N200bn USSD Debt.

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The Nigerian Communications Commission (NCC) is set to expose 18 banks that have failed to settle their outstanding debts totaling N200bn for using Mobile Network Operators’ Unstructured Supplementary Service Data (USSD) platforms.

According to industry sources, only four banks have complied with the payment requirements outlined in a joint directive issued by the Central Bank of Nigeria (CBN) and the NCC in December 2023. The directive required 60% of pre-API invoices to be settled by January 2, 2025.

The NCC’s decision to expose the defaulters is part of efforts to resolve the long-standing debt dispute between banks and telecom companies. Telecom operators have threatened to withdraw USSD services due to unpaid debts.

Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria, noted that while smaller banks have started making payments, tier-one lenders owe the most and have yet to make significant payments. 

“We are seeing payments from smaller players, but the big banks, which owe the most, have not been forthcoming,” Adebayo said in a call. 

“We are now waiting for intervention from regulators, including the CBN and NCC, to resolve the issue.” He added.

Ejike Onyeaso, Director at Adaba Consult, emphasized that telecom companies should be compensated by banks for leased lines used for USSD services. Onyeaso warned that suspending USSD services could disrupt banking operations.

The NCC’s planned exposure of defaulting banks is expected to affect millions of Nigerians who rely on USSD services for banking transactions. The commission will provide guidelines for subscribers to switch to other banks and maintain uninterrupted access to banking services.

The service suspension, expected to take effect in two weeks, will significantly impact Nigerians without internet access who rely on USSD services for banking transactions.

Pre-API invoices refer to outstanding payments for USSD services incurred before the implementation of Application Programming Interfaces in February 2022. Before API adoption, USSD transactions were managed using older methods, leading to billing and reconciliation disputes between banks and telcos.

Electronic payment statistics from the CBN show that between January and June 2024, 252.06 million USSD transactions totaling N2.19tn were recorded. This represents a significant increase from the 2023 full-year data, which showed N4.84tn transacted via USSD codes across 630.6 million transactions.

Initially developed by telcos for airtime and subscription services, USSD has been widely adopted in the banking sector due to its accessibility without internet connectivity.

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