The Nigerian Communications Commission (NCC) has directed telecommunications operators to temporarily suspend Unstructured Supplementary Service Data (USSD) services for 18 banks that have failed to clear a collective debt of N200 billion, which has been accruing since 2019.
The Background of the Debt Crisis
The conflict stems from an unresolved financial relationship between banks and telecom operators. Despite repeated directives, most recently from the NCC and the Central Bank of Nigeria (CBN), many banks have failed to pay their dues. Only four banks complied with a December 2024 directive to settle at least 85% of outstanding invoices.
USSD services are critical for millions of Nigerians who rely on them for mobile banking, especially in areas with limited internet connectivity. As Mr. Ebenezer Onyeagwu, former Group Managing Director of Zenith Bank Plc noted, “The introduction of USSD changed everything,” underscoring its transformative role in Nigeria’s financial ecosystem.
The Impact of the Suspension
The suspension is expected to significantly disrupt services, as USSD is a key channel for financial transactions. Between January and June 2024, USSD transactions totaled N2.19 trillion. While this represents a 54.75% decline from N4.84 trillion in the same period in 2023—attributable to a shift toward internet transfers—the volume remains substantial, reflecting its importance to Nigeria’s economy.
NCC’s Planned Public Notification
The NCC plans to give a two-week notice before implementing the suspension, allowing the public time to explore alternative payment methods. The notification will include the names of the defaulting banks, ensuring transparency and preparing customers for the temporary disruption.
Implications for Customers and Financial Institutions
The suspension could increase pressure on internet-based banking platforms, which may not fully accommodate the user surge. It may also prompt customers to seek alternative banking solutions, potentially benefiting fintech companies and non-traditional payment providers.
This decisive move by the NCC highlights the importance of accountability and compliance in Nigeria’s financial system. It also serves as a wake-up call for the banking sector to prioritize debt settlement and strengthen collaboration with telecom operators. Resolving this issue is critical to maintaining Nigeria’s digital financial infrastructure and supporting the millions relying on USSD services daily.
