Nigeria’s mobile banking ecosystem is entering a new phase as the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) jointly approve a new End User Billing (EUB) model for USSD services. This reform, which will see charges deducted directly from users’ airtime balances, aims to end years of disputes between telecom operators and commercial banks over who should bear the cost of delivering USSD-based transactions.

For years, USSD—short codes like *737# or *894#—has been the backbone of financial inclusion in Nigeria, powering mobile money transfers, airtime purchases, bill payments, and balance checks without the need for internet access. Yet, behind the convenience lay a financial standoff: telcos insisted banks should pay them for facilitating USSD transactions, while banks argued the fees should be borne by customers. The impasse led to service disruptions, with some banks temporarily blocking USSD channels over unpaid debts to telcos.

The EUB model changes the rules entirely. Now, whenever a customer initiates a USSD transaction, the service cost—often between ₦6.98 and ₦20 per session—will be automatically deducted from their airtime balance. This direct payment structure removes banks from the middle of the billing process, allowing telecom operators to collect their fees seamlessly while ensuring continuous service for end users.

Advocates of the new model say it will improve service reliability, as telcos will have a guaranteed revenue stream to maintain and expand their USSD infrastructure. It could also reduce operational tension between banks and telcos, freeing both sides to focus on customer experience rather than billing disputes. For rural users and low-income earners, the model offers a more transparent and predictable system—no hidden deductions from bank accounts, just a clear, upfront charge from airtime.

However, the change is not without concerns. Consumer protection advocates worry that the new billing structure could discourage usage among low-income users, especially those who keep minimal airtime balances. In a country where financial inclusion remains a work in progress, the fear is that higher out-of-pocket costs could limit access to mobile banking services, particularly in underserved communities.

From a technology and regulatory standpoint, the move reflects a growing trend of harmonized policy-making between the NCC and CBN. Rather than leaving cross-sector disputes to escalate, the two agencies are now showing a willingness to jointly implement solutions that balance industry sustainability with public interest. This could set a precedent for resolving other digital service disputes, such as mobile payments for public services or interoperability between fintech platforms.

Looking ahead, the real test will be in public adoption. If users perceive the charges as fair and services as seamless, the EUB model could usher in a more stable and transparent era for USSD banking. But if affordability remains a barrier, Nigeria’s ambitious financial inclusion goals might still face hurdles. In the end, the success of this policy will depend not just on regulatory alignment, but on ensuring that technology remains both accessible and affordable for the millions who rely on it daily.

Shuaib S. Agaka

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The Nigerian Communications Commission (NCC) has authorised telecommunications companies to disconnect the Unstructured Supplementary Service Data codes assigned to nine financial institutions due to unpaid debts.

This directive was made on Tuesday in a public notice signed by NCC’s Director of Public Affairs, Reuben Muoka.

The telecom regulator said affected banks must settle their outstanding obligations by January 27, 2025, or risk losing access to their USSD codes.

These codes, essential for enabling mobile banking services, could be reassigned to other applicants if the debts remain unresolved.

The commission revealed that, as of Tuesday’s close of business, nine out of 18 financial institutions had not complied with regulatory directives.

While other banks have cleared their debts, the total amount initially owed by the financial institutions was reported to exceed N200 billion.

However, the regulator did not disclose the precise debt currently owed by the affected banks.

According to the NCC, some of the unpaid invoices have remained unpaid since 2020, indicating a prolonged financial dispute between the banks and telecom operators.

Part of the notice read, “By the information made available to the commission as at close of business on Tuesday, 14th January 2025, of a total of 18 financial institutions, the nine institutions listed below have failed to comply significantly with the directives in the Second Joint Circular of the Central Bank of Nigeria and the commission dated December 20, 2024, for the settlement of outstanding invoices due to MNOS, some since 2020.”

The regulator noted that banks’ failure to comply with the CBN-NCC joint circular also means that they are unable to meet the good standing requirements for the renewal of the USSD codes assigned to them by the commission.

It added, “In fulfilment of its consumer protection mandate, the commission wishes to inform consumers that they may be unable to access the USSD platform of the affected financial institutions from January 27, 2025.”

The affected financial institutions include Fidelity Bank Plc, First City Monument Bank, Jaiz Bank Plc, Polaris Bank Limited, Sterling Bank Limited, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, and Zenith Bank Plc.

The affected USSD codes include 770, 919, and 822, among others.

The NCC emphasised that the financial institutions had been duly notified of the need for immediate compliance and warned that consumers may face service disruptions if the issues remain unresolved.

This development highlights ongoing tensions between telecommunications companies and financial institutions over unpaid USSD-related debts, a challenge that has persisted for years.

Meanwhile, data from the CBN revealed that 252.06 million transactions worth N2.19 trillion were conducted via USSD between January and June 2024.

This represents a significant growth compared to 2023 when 630.6 million transactions valued at N4.84tn were completed using USSD codes.

Originally designed by telecom operators for services like airtime purchases and subscriptions, USSD has become a key tool in the banking sector, offering financial services to users without requiring an Internet connection.

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TECHDIGEST – The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele has announced that Nigerians will from next week use USSD code for eNaira transactions.

The apex boss revealed the new feature on eNaira at the Grand Finale of the 2022 eNaira Hackathon in Abuja recently, believing that the move would help boost eNaira acceptability among Nigerians.

USSD is a code programmed into your SIM card or cell phone to make it easier to perform certain actions.

Speaking on USSD benefits, Emefiele says, “Nigerians, both banked and unbanked, will be able to open an eNaira wallet and conduct transactions by simply dialing *997 from their phones.

“Shortly after this, both merchants and consumers with bank accounts can use the NIBSS Instant Payment (NIP) to transfer and receive eNaira to any bank account”.

“This will further deepen the integration of the eNaira with the existing national payment infrastructure”.

Additionally, he “promise to increase the level of Financial Inclusion in the country because just like the Naira, the eNaira is expected to be accessible to all Nigerians and would provide more possibilities to bring in the unbanked into the digital economy”.

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TECH DIGEST – Deposit Money Banks (DMBs) in the country have started notifying their customers of the commencement of the N6.98 deduction on Unstructured Supplementary Service Data (USSD) transactions, but two major line transactions are exempted, findings by TechEconomy.ng showed over the weekend.

The new charge replaces the current N4.89 session billing structure, but will not be charged on two items: Airtime and Data purchases. One of the emails sent to a customer by a Tier 2 lender on the matter reads in part:

“Please be informed that you are now required to pay a fee of N6.98 to your mobile network provider for every banking transaction carried out on all USSD banking platforms.

“This means that when you access any banking service using USSD, a fee of N6.98 will be charged to your bank account, which is in turn remitted in full by your Bank, to your mobile network provider.

“Please note that Airtime and Data purchases via USSD are exempt from this charge.”

The implementation of the new billing structure follows an agreement reached in March between DMBs and Mobile Network Operators (MNOs), which was brokered by the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), that the N6.98 charge should replace the previous charge of N4.89 session billing structure for USSD transactions.

The CBN and the NCC had called the meeting after MNOs announced plans to suspend USSD services over banks’ failure to settle N42 billion accumulated debt .

The joint statement by CBN and NCC read in part: “Effective March 16, 2021, USSD services for financial transactions conducted at DMBs and all CBN – licensed institutions will be charged at a flat fee of N6.98k per transaction.

This replaces the current per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion.

This approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.

“To promote transparency in its administration, the new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts. Banks shall not impose additional charges on customers for use of the USSD channel.

“A settlement plan for outstanding payments incurred for USSD services, previously rendered by the MNOs, is being worked out by all parties in a bid to ensure that the matter is fully resolved.

“MNOs and DMBs shall discuss and agree on the operational modalities for the implementation of the new USSD pricing framework, including sharing of Application Programme Interface (APIs) to enable seamless, direct and transparent customer billing.”

One of the leading MNOs, MTN Nigeria, also confirmed the implementation of the plan, adding that the deductions commenced on June 3.

“Effective June 3, 2021, each USSD Banking transaction will attract a charge of N6.98 exclusive of VAT for use of the USSD Banking channel. The money will be deducted from your bank, by your bank,” the Telco stated.

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TECH DIGEST – Users of Unstructured Supplementary Service Data (USSD) services in Nigeria have started getting notice of N6.98 charges for each transaction session.

This follows the agreement reached in March between the deposit money banks and the telecommunication firms after the intervention of the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), in a dispute about accumulated debts.

A notice received by a bank customer read, “Welcome to USSD Banking. Please note, a N6.98 network charge will be applied to your account for banking services on this channel.”

The CBN and the NCC had in a joint statement said that the introduction of the new USSD charges is to promote transparency adding that it would be collected on behalf of Mobile Network Operators (MNOs), who provide infrastructure for the services to operate, directly from customers’ bank accounts.

The joint statement by CBN and NCC read, ‘’We are pleased to announce that after comprehensive deliberations on the key issues, a resolution framework acceptable to all parties was agreed thus:

“Effective March 16, 2021, USSD services for financial transactions conducted at DMBs (Deposit Money Banks) and all CBN-licensed institutions will be charged at a flat fee of N6.98 per transaction. This replaces the current per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion.

‘’To promote transparency in its administration, the new USSD charges will be collected on behalf of MNOs (Mobile Network Operators) directly from customers’ bank accounts. Banks shall not impose additional charges on customers for use of the USSD channel.”

USSD is a Global System for Mobile Communications (GSM) protocol that is used to send text messages and is similar to Short Message Service (SMS). USSD uses codes made up of the characters that are available on a mobile phone.

It is also a critical channel for delivering financial services, especially for those who do not have access to physical banking infrastructure or internet services.

The CBN and NCC had said that the USSD channel is optional, as several alternative channels such as mobile apps, internet banking and ATMs may be used for financial transactions.

However, analysts have raised some concerns over the effect of the new charge on CBN’s effort to encourage financial inclusion, especially for individuals who do not have access to internet services.

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TECH DIGEST – Four days after commercial banks disconnected customers of MTN Nigeria from the use of the Unstructured Supplementary Service Data (USSD) code for airtime vending, the banks yesterday reconnected them following the intervention of the Minister of Communications and Digital Economy, Dr. Isa Ibrahim Pantami and the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele.

The banks on Thursday night had disconnected only MTN customers from accessing the USSD code on airtime vending from all channels linked to USSD code.

According to the banks, they took the decision because MTN reduced the discount offered to banks on airtime sales from four per cent to 2.5 per cent.

MTN’s action did not go down well with the banks, who cited the cut making the cost of managing the infrastructure and other operational costs they incurred as being unprofitable for them.

TechDigest investigation showed that as at yesterday, the customers were reconnected and they could access the USSD code.

Majority of MTN customers who accessed the code yesterday bought MTN airtime from their bank accounts.

Both MTN and the Nigerian Communications Commission (NCC), the telecoms industry regulator, confirmed to THISDAY yesterday that the banks had reconnected all MTN customers that were disconnected.

Director, Public Affairs at NCC, Dr. Ikechukwu Adinde, told THISDAY that the minister was upset with the disconnection, just like the telecoms operators, adding that he had to intervene by calling Emefiele, to a meeting yesterday.

According to him, the CBN governor and the minister addressed the commercial issue that led to the disconnection and directed the banks to reconnect the telecommunication company immediately, in order not to further disenfranchise MTN customers that were adversely affected by the disconnection order.

“Now that the customers have been reconnected, the telecoms industry is happy, MTN customers are happy and the banks are also happy,” Adinde said.

Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, had earlier expressed his displeasure over the disconnection and blamed the banks for taking such action without first discussing the issue with the NCC.

““If this is the way the banks want to react to the USSD issue between banks and telcos, by disconnecting innocent subscribers belonging to MTN, only time will tell, but I can assure them that their action will not lead to the N42 billion debt forgiveness because the telecoms industry will not overlook the N42 billion the banks are owing telecoms operators over the use of USSD code for financial transactions. The banks had claimed that they do not charge for USSD transactions, but report has it that the banks have been charging customers for USSD transactions,” Adebayo had earlier told News Media

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TECH DIGEST – Commercial banks have reconnected MTN customers earlier denied access to the unstructured supplementary service data (USSD) payment channels.

In a letter seen by TheCable, on Sunday, Karl Toriola, managing director and chief executive officer of MTN Nigeria, announced a decision to revert discount offered to banks on airtime sales to 4.5 percent commission.

The mobile network operator (MNO) had reduced banks’ commission from an average of 3.5 percent to 2.5 percent, this led to a disagreement between MTN and commercial banks.

“Our virtual meeting between yourself (Wigwe) and Segun Agbaje (MD of GTBank) on the one hand and myself (Toriola) and Modupe Kadri (chief financial officer of MTN Nigeria) on the other refers,” the statement read.

“In an attempt to resolve the current USSD recharge impasse, given the interventions from our regulators, we hereby agree The Banks revert to the status quo of 4.5% commission.

“However, the banks and MTN Communications Nigeria Plc, shall sit to agree on various options that will result in the reduction in the costs on 6th of April 2021.”

Commercial banks had asked MTN to reverse its action to the old commission or would block MTN airtime recharge services in both mobile banking applications and unstructured supplementary service data (USSD) payment channels.

Due to MTN’s refusal to revert back the commission percentage, commercial banks except Zenith Bank, which is connected directly to the MNO, left many subscribers stranded and frustrated as they were informed to recharge their lines with physical cards.

On Friday, Isa Pantami, minister of communications and digital economy, had said the issue encountered by MTN users through the USSD channel will be resolved soon.

On Saturday, MTN had offered alternative channels for its subscribers to use in recharging their lines such as dialling *904# and *606#, and other electronic payment platforms.

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TECH DIGEST – MTN customers in Nigeria now have alternative electronic payment platforms to recharge their phones as the mobile network operator on Saturday announced that customers can recharge airtime through payment solutions platforms such as Flutterwave, Jumia Pay, OPay, Kuda, Carbon and BillsnPay.

MTN in a statement on Saturday by its Senior Manager, External Relations, Funso Aina, also said customers could recharge airtime by dialing *904# and *606#.

This is coming barely 24 hours after commercial banks on Friday disconnected MTN customers from banking channels including the Unstructured Supplementary Service Data and banking apps, leaving millions of MTN subscribers frustrated as they were unable to recharge airtime via USSD amid the Easter celebrations.

MTN, with about 77 million subscribers, making up about 45 per cent of the total telecommunication market share in Nigeria, is arguably the largest telecommunication operator in the country.

The PUNCH had earlier reported that the telco reduced the banks’ commission from an average of 3.5 per cent to 2.5 per cent which predicated the actions of the banks.

The banks had written MTN to revert to the old commission, otherwise, they would block MTN airtime in all their channels.

The banks, except Zenith Bank which was connected directly to MTN, subsequently blocked MTN from their banking channels, leaving customers stranded as they were unable to recharge virtually.

Minister of Communications and Digital Economy, Isa Pantami, had said the matter would be resolved. “We have reached an advance stage of resolving the issues, for the services to be restored to our citizens,” he had said.

But in the statement on Saturday, MTN said, “It will interest you to note that for the benefit of our customers who have been greatly inconvenienced by the service suspension, we now have alternative channels of accessing MTN services electronically.”

Speaking exclusively with Sunday PUNCH, a source in the industry said the most important factor is that MTN was able to quickly come up with alternatives through fintech companies.

“There are so many possibilities through fintech. It is about being responsive and flexible to alternatives for customers to enjoy MTN services as they have been enjoying before the disconnection by the banks. It is about being solution-focused,” the source said.

Asked whether MTN might have used the fintech platforms as alternatives before the disconnection, the source, who craved anonymity, said the development was totally new and spontaneous.

The source could not, however, give an update on the discussion the minister started with the Central Bank of Nigeria and the Nigerian Communications Commission to broker peace between the banks and MTN.

But the source stressed that even after the issue becomes resolved, it would be wise for MTN not to put its eggs in a basket. The source said it would be wise for MTN not to abandon the fintech companies because “if it happens today, who says it will not happen tomorrow?”

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TECH DIGEST – The Central Bank of Nigeria (CBN) has explained that the harmonisation of all Unstructured Supplementary Service Data (USSD) fees to a single rate of N6.98 will stabilise Nigeria’s payment system.

The CBN, in a statement released on Wednesday, March 17 said the exercise, which has the backing of key stakeholders will boost bank customers’ confidence in the payment system, bring more unbanked and underbanked to the financial system and ensure sustainability of the services to e-payment customers.

The banking regulator added that the new plan replaces the per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion adding that the approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.

According to it, wide acceptance and usage of the USSD shows that it remans the best and fastest available communications technology that delivers mobile financial services to s, low-income customers.

The apex bank said it will continue to engage relevant operators and all stakeholders to promote cheaper, seamless access to mobile and financial services for all Nigerians.

It said that with the new policy, the disagreements that have for long exists between the MNOs and Deposit Money Banks (DMBs) will be put to rest, while assuring that there will no longer be additional charges on customers for use of the USSD channel.

The central Bank said: “The protracted disagreements between DMBs and MNOs concerning the appropriate USSD pricing model for financial transactions has been put to rest.”

The CBN explained further that the USSD is a critical channel for delivering financial services, particularly for the underserved and/or financially excluded.

According to it, “MNOs and DMBs shall discuss and agree on the operational modalities for the implementation of the new USSD pricing framework, including sharing of Application Programme Interface (API) to enable seamless, direct and transparent customer billing. DMBs and MNOs are committed to engaging further on strategies to lower cost and enhance access to financial services.”

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TECH DIGEST – The Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), Engr. Gbenga Adebayo today disclosed that the N42 billion indebtedness to Mobile Network Operators (MNOs) by Deposit Money Banks (DMBs) over the Unstructured Supplementary Service Data (USSD) has not been forgiven or wished away.

Engr. Adebayo, who was speaking on Arise TV, rather said the issue of the 42.2 billion indebtedness will be sorted out by both the Mobile Network Operators (MNOs) by Deposit Money Banks (DMBs), stressing that what is more important is the resolution of the protracted dispute by suggesting ways forward.

“What is important at this time is the way forward. The way forward is that telecom consumers will henceforth pay a flat fee of N6.98k per transaction, which has been agreed by both parties,” he said on the TV program monitored by our reporter.

While assuring that ALTON as an umbrella body of all licensed telcos in Nigeria is interested in promoting cheaper, seamless access to mobile and financial services for all Nigerians, Engr. Adebayo noted that the USSD channel is optional, as several alternative channels such as mobile apps, internet banking and ATMs may be used for financial transactions.

Deposit Money Banks (DMBs) were reported to be owing Mobile Network Operators (MNOs) a whopping debt of over Forty-Two Billion (N42B) Naira on Unstructured Supplementary Service Data (USSD) services, rendered by the telcos.

This led to a threat by the telcos to disconnect the service from the banks. But in a stakeholders’ meeting, which was chaired by the Minister of Communications and Digital Economy, Dr. Isa Pantami and attended by the various MNOs, Association of Licensed Telecommunications Operators of Nigeria (ALTON), Association of Telecommunications Companies of Nigeria (ATCON), DMBs (represented by the Chairman, Body of Bank CEOs) and the sector regulators – Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC), the stakeholders resolved that effective March 16, 2021, USSD services for financial transactions conducted at DMBs and all CBN – licensed institutions will be charged at a flat fee of N6.98k per transaction.

This replaces the current per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion. The stakeholders believe that this approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.

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