CBN assures of amicable resolution of banks, telcos dispute

The Central Bank of Nigeria (CBN) has said it is aware of the protracted dispute between the banks and telecommunication operators and has been engaging all stakeholders to ensure amicable resolution.

Telcos had threatened to disconnect banks Unstructured Supplementary Service Data (USSD) over debts amounting to about N120 billion.

A statement signed by Isa AbdulMumin, the CBN’s acting director, corporate communications, said it was due to the direct intervention of the CBN Governor in March 2021 that a per session price of N6.98 (including to settle any outstanding fees) was agreed upon between the banks and telcos.

“As far as we are aware, since 2021, deposit money banks (DMBs) continue to collect the USSD fees and remit the same on behalf of the telcos based on that agreement,”AbdulMumin said.

Read also: Top 10 banks with highest income tax payments in Q1

“We understand the latest dispute concerns technical issues regarding the definition of a successful transaction from a bank and telco perspective.”

USSD fees are charged by DMBs using an automated system which bills the customer for a successful transaction only after a banking service is consumed. For the Telcos, a successful transaction happens once the customer has dialed the USSD short-code which may not lead to the consummation of a banking service. Whilst Such truncated transactions are not registered on the DMBs collection platform and thus not billed to bank customers, telcos expect the DMBs to charge customers once the short-code is dialed, whether or not a financial transaction is consummated.

At a recent meeting of the DMBs and the Telco representatives chaired by the CBN governor to resolve the issue, he acknowledged the telcos right to collect all legitimately earned fees due to them and to recover their cost. Following discussion the direct billing model was proposed as a lasting solution to the issue. This would enable telcos full visibility of USSD transactions and allow them to charge their customers directly. The feasibility of the model is still being worked out by the relevant stakeholders.

“USSD is a critical channel leveraged primarily by the financially excluded, vulnerable and critical mass,” AbdulMumin said.

“The CBN remains committed to ensuring that the areas of contention related to collection of telco charges for USSD are resolved in the interest of the financial system and overall economy.”