The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have raised concerns over the long-standing dispute between Deposit Money Banks (DMBs) and Mobile Network Operators (MNOs) regarding the utilisation of USSD platforms for banking services. Despite significant efforts, the dispute has remained unresolved, prompting a new set of directives aimed at addressing the matter.

In a second joint circular, signed by Oladimeji Yisa Taiwo, Acting Director of Payments System Management Department at the CBN, and Chizua White, Head of Legal & Regulatory Services at the NCC, the regulators provided a framework to resolve the USSD debt issue.

According to them, DMBs are mandated to settle 85 percent of all outstanding invoices issued after the implementation of Application Programming Interfaces (APIs) by December 31, 2024.

Furthermore, all future invoices must also be settled at 85 percent within one month of issuance.

Banks are required to pay 60 percent of invoices predating the API implementation as full and final settlement.

Payment plans, whether lump sum or installments, must be finalized between DMBs and MNOs by January 2, 2025.

Where installment payments are proposed, such plans must consist of equal monthly payments, with all payments completed by July 2, 2025.

Transition to End-User Billing (EUB)

Compliance with the aforementioned directives is a prerequisite for transitioning to an End-User Billing (EUB) system. The NCC will activate the necessary regulatory processes to enable this transition and will provide public guidance on the matter.

Part of the guidance includes the following. To ensure fairness in billing, MNOs must adopt a rule that any USSD session lasting less than 10 seconds will not be billable.

Migration for prepaid billing DMBs

Banks currently operating under prepaid billing may transition to EUB after fulfilling all regulatory requirements.

Discontinuation of Litigation

Both DMBs and MNOs have been instructed to discontinue any ongoing legal proceedings related to the USSD debt dispute,? it read in part.

The circular underscored that non-compliance with these directives would attract regulatory sanctions from both the CBN and NCC.

The USSD debt issue emerged from allegations that some banks were deducting the N6.98 USSD fees from customers but failing to remit the funds to telecom operators. Instead, the banks reportedly used these funds to address other financial obligations.

As a result, telecom companies, under the directive of the NCC, threatened to disconnect nine banks from USSD services by January 27, 2025, if they failed to settle outstanding debts. The affected banks include Fidelity Bank, First City Monument Bank (FCMB), Jaiz Bank, Polaris Bank, Sterling Bank, United Bank for Africa (UBA), Unity Bank, Wema Bank, and Zenith Bank. Collectively, their debts are estimated to exceed N160 billion.

The NCC issued a notice emphasising its commitment to consumer protection and warned customers of the potential loss of USSD services with these banks if the debts remain unpaid. ?As part of its commitment to consumer protection, the Commission wants to inform consumers that they may lose access to the USSD services of the affected banks from January 27, 2025,? the NCC stated.

Previously, telecom operators threatened to suspend the USSD services of 18 banks due to unpaid bills totaling over N200 billion. However, the recent directives signal a renewed effort to resolve the impasse and ensure that consumers continue to enjoy seamless USSD services.

The CBN and NCC aim to resolve the USSD debt issue through the outlined measures, ensuring a balance between the interests of telecom operators, banks, and consumers. A key element of this resolution is the shift to an End-User Billing system, which will streamline the payment process and minimize disputes.

In addition to the financial directives, the circular encouraged collaboration between banks and telecom operators to implement these measures effectively. It also directed both parties to ensure prompt and transparent communication to avoid further misunderstandings.

For customers, the resolution of this issue is critical to maintaining uninterrupted access to USSD services, which are essential for mobile banking transactions. The adoption of the ?10-Second Rule? is expected to reduce disputes over unfair billing and enhance consumer trust.

As part of the regulatory process, the NCC and CBN will provide public guidance on the transition to the new billing system. This step is expected to foster a smoother shift to End-User Billing while ensuring that consumers are adequately informed.

The ongoing efforts by the CBN and NCC to address the USSD debt dispute reflect a commitment to safeguarding consumer interests and maintaining stability in Nigeria?s financial and telecommunications sectors. By enforcing these directives, the regulators aim to resolve the debt crisis, ensure fair practices, and support the continued growth of digital financial services in the country.

While challenges remain, the outlined resolutions provide a clear path forward, emphasising accountability, transparency, and collaboration among all stakeholders. The next steps will determine the success of this initiative and its impact on the broader financial ecosystem. (Nigerian Tribune)

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