It appears that the tussle between Nigerian lenders and telecommunication providers, over who would be at the forefront in piloting the push for financial inclusion, is gradually materialising.
The quest on whether the provision of digital financial services should either be the Telco-led or bank-led, in other to financially include the over 36 per cent of the population who are currently unbanked, became obvious yesterday, when both MTN and the banks, provided conflicting claims over controversies on USSD charges in statements issued to BusinessDay.
Over the weekend, MTN, Nigeria’s biggest network provider sent a message to its over 60.3 million network users notifying them that effectively, it plans to charge N4 per 20 seconds for USSD services.
According to the network provider, the plans to charge the extra cost on the service got the nod of the Banker’s Committee hence, MTN noted that customers of the network could contact their various banks for further information.
Meanwhile, Bank CEOs, in a statement, said there was no approval from the banking committee whatsoever that gave the telecommunication provider the go-ahead to enact any additional charge.
“The banks did not ask MTN to start charging customers as contained in the text message. The decision on whether and what amount, to charge a customer for accessing USSD is entirely that of the Telco company, in the same way a customer is billed for calls, SMS and data,” the Body of Banks CEOs said in a statement seen by BusinessDay, yesterday.
“Furthermore, MTN is the only Telco that is yet to implement end-users billing which is the standard practice for customers -initiated transactions. This is despite the fact that the banks, working with the central bank of Nigeria have engaged MTN over a period of more than one year to try and bring down the cost of USSD to aid financial inclusion,” they added.
MTN Nigeria, alongside other telecommunication providers, have been in the forefront in the push that will allow Telco provide mobile money services, a move that has been deployed and has proven in several other countries, including Ghana and Kenya, where it operates
MTN recently was granted a “super-agent” license which allows it to set up an agent network through which it can provide financial services.
It’s the first step in MTN’s plans to finally roll out mobile money services in Africa’s largest economy as the company says it has also applied for a payment service bank license, which will allow it “offers a broader and deeper range of financial services.”
The license comes after reforms by Nigeria’s central bank last October permitting telecoms operators to get mobile money and banking licenses in a bid to boost financial inclusion and facilitate the long-held ambition for a cashless society.
The four major Telcos (MTN, Glo, Airtel and 9-mobile) combined have some 173.6 million customers, compared to the 21 Deposit Money Bank’s with about 30 million bank accounts with unique bank verification numbers (BVNs).
The Telco’s also have the resources to deploy in the coming fight.
MTN Nigeria Full Year 2018 results showed it had 21.6 million smartphone users on its network, Ebitda margins of 44 percent and revenues eclipsing the N1 trillion mark.
“I think the reactions from the financial institutions are meant to frustrate the push by the telecommunication provider, who has been seen as a threat in the rolling out of mobile money services,” said a source, who spoke on condition of anonymity.
The plans by MTN, to implement an additional charge on USSD, gained widespread criticism from all fronts, including the Ministry of Communication and the Central Bank of Nigeria who ordered an outright reversal of the plan.
The Minister of Communications, Isa Ali Panatmi via his official twitter handle @DrIsaPantam, said he has directed the Nigerian Communication Commission to ask MTN to halt the planned charge.
Godwin Emefiele, Governor of the Central Bank, on the hand, while responding to questions at the side-line of the World Bank/IMF meetings in Washington DC, opposed to the charges and asked banks to take off their businesses from telecommunication operators charging bank customers using USSD to make transactions.
However, in a mail response sent to BusinessDay, MTN said it had stayed action on implementing the proposed charges.
“MTN has not implemented charges for USSD following the FG’s directive,” the Telecom provider told BusinessDay.
The Telecommunication provider noted that the proposed charge of N4 for every 20-second session is currently the lowest in the industry as other network operators currently charge above that rate. It said other network providers implemented these charges a long time ago without notifying their subscribers.
MTN also noted that the banks still deduct an average of N50 for USSD transactions even though the infrastructure for such transactions are provided and maintained by the network operators.
The 2018 EFINA Access to Financial Services survey findings, showed that 36.8 percent of the adult population in the country, are financially excluded.
The country’s mobile operators; MTN, Airtel, Globacom and 9mobile recently announced their commitment to deepen financial inclusion to at least 90 million customers in about 2 years, once issued payment service banking (PSB) or mobile money licenses.
MICHEAL ANI
