The House of Representatives on Tuesday urged telecommunication operators in the country to halt the planned withdrawal and suspension of Unstructured Supplementary Service Data (USSD) services to banks and other financial institutions.
The Association of Licensed Telecommunications Operators of Nigeria had threatened to disconnect financial service providers from USSD from Monday, March 15, 2021 until the concerned institutions pay the over N42 billion debt they owe the telcos.
But the House, while adopting a motion of urgent public importance sponsored by Nicholas Ossai (PDP, Delta) at plenary, mandated the Committee on Telecommunications to liaise with telecommunications operators, Nigerian Communications Commission (NCC), Central Bank of Nigeria (CBN) and Nigerian banks and other financial institutions with a view to resolving the impasse and report back to the House within six weeks for further legislative action.
Moving the motion, Ossai noted that the CBN, in a bid to realise one of its statutory mandates of promoting monetary stability and a sound financial system in Nigeria, designed a cashless policy that would provide innovations, easy mobile payment, cost reduction and convenient financial services to millions of Nigerians living in urban and rural areas.
He said one of the innovations introduced is the USSD services which is used by Global System for Mobile Communication Technology to communicate with their service providers’ computers via text messages to check account balance or mobile airtime, generate bank statement or do fund transfer and data balance enquiries or to receive one-time passwords or pin codes.
The lawmaker further noted that the USSD service which is controlled by Mobile Network Operators is a critical infrastructure used to provide mobile financial services to banks and other financial institutions in cell phones at very low cost, without requiring access to the user’s SIM card.
Ossai said the USSD infrastructure service houses all the Nigeria telecommunications operators – MTN, Glo, Airtel & 9Mobile – and internet service providers.
He observed that the USSD made it possible for millions of Nigerians who do not have smartphones or data/internet connections to access banking and other financial services on a daily basis, especially during the COVID-19 movement restrictions.
He said that he was “informed that between January to June 2020, the value of USSD transfer payment in Nigeria amounted to over N390 billion (about $1 billion)”.
He was “disturbed that since October 2019 till date, there has been a dispute between Nigeria telecommunication operators and the Nigerian banks over who should pay for USSD service sessions, and the banks have always wanted the telecommunication operators to charge customers directly, but the telecommunication operators insisted that the services were being offered to the banks and as such the banks should be the ones to pay the telecommunication operators”.
Ossai said between the months of July and August 2020, the operators had an agreement with the Federal Ministry of Communications & Digital Economy and the NCC that Nigerian banks should pay the telecommunication operators for the use of USSD at an agreed individual price mechanism.
He said he was therefore disturbed that the dispute has lingered for a long time to the extent that parties have been finger-pointing each other, and all efforts at resolving the dispute proved abortive and the debt kept increasing until it has reached N42 billion at present.
Subsequently, the telecommunication operators issued notices threatening to withdraw and suspend the USSD service from the Nigerian banks.
The lawmaker said he was worried that if the USSD service is withdrawn, Nigerian telecommunication users would fall back and continue with their old traditional modes and channels, such as mobile bank apps, internet banking, ATM, PoS, that make banking services uninteresting, inconveniencing, with a high cost of financial transactions, which would further put people’s health in danger as a result of crowding together.