Nigerian consumers cannot afford to allow the Unstructured Supplementary Service Data (USSD) channel to be enmeshed in crisis because it is arguably the most democratic financial platform in the country. Specifically, the USSD is the lifeline that extends banking services to millions of citizens, particularly the rural, low-income, and financially excluded people, who do not own smartphones or cannot afford reliable Internet access. For the service data channel to be in crisis will constitute a threat to the country’s financial inclusive goal and make Nigerians pay for services not offered, as is currently the case.

There was a serious worry by many Nigerians lately when this critical tool was plagued by a twin crisis: high failure rates and the brazen injustice of continuous charges even when the transaction is not completed. This recurring phantom debit is more than a technical glitch; it’s a systemic failure that directly undermines consumer trust and Nigeria’s financial inclusion objectives. Indeed, billions of naira are currently at stake as Nigerians continue to pay for failed USSD transactions. It is unfair, and something serious must be done about it.

Data from the Central Bank of Nigeria (CBN) and the Nigeria Inter Bank Settlement System (NIBSS) showed that the disaggregated USSD data for 2025 was generally only available by Q1 and often bundled with the broader NIBSS Instant Payment (NIP), which includes USSD, Mobile App, Internet Banking, and PoS transfers. The total NIP value rose to N284.9 trillion in QI, and as of July, e-payment transactions were put at N384 trillion. In the first six months of 2024, from 252.06 million volumes of transactions, the value of USSD was N2.19 trillion. In 2023, it was 630.6 million volumes, which amounted to N4.84 trillion.

A long battle of about five years between the Deposit Money Banks (DMBs) and the telecom operators, which revolved around the technicalities of the USSD technology and accruable payments to the telcos after usage, culminated in over N200 billion accumulated debt and led to the refusal of the DMBs to pay. Both the CBN and the Nigerian Communications Commission (NCC) had to step in to prevent the telcos from withdrawing the service earlier in the year. That intervention saved the sub-sector from collapse and birthed the new payment regime. On June 18, 2025, the End-User billing system was formally introduced, and this involved the deduction of charges directly from customers’ airtime. But instead of bringing succour, it appears this new system has further compounded the problem of bank customers using the service. Data from various studies suggest a worrying trend. While mobile app transactions show higher success rates, USSD-based transactions frequently suffer from lower reliability, with a significant number failing. The reasons vary from bank server downtime and network outages by Mobile Network Operators (MNOs) to simple session timeouts.

The situation is considered a cruel twist for the customer regarding the mandatory N6.98 per transaction charge. This fee, instituted as a flat charge to resolve a long-standing debt dispute between DMBs and MNOs, is often applied to the user the moment the USSD session is initiated, or deducted from their airtime balance. When the subsequent transaction fails, whether it’s a simple balance check or a fund transfer, the core function is aborted, but the consumer is left with an irreversible loss of the service fee. It smacks of an unconscionable business model where the consumer bears the financial risk for the service providers’ infrastructural inadequacies. An analyst painted the scenario as paying a taxi fare in advance, only for the car to break down two minutes into the trip, and the driver refusing to refund the payment because “the engine was started”. This is the reality with the consumer in Nigeria’s USSD space. It should not be so. It is not so in other climes.

The consequences of this pervasive failure extend far beyond the negligible charge. For the vast majority of Nigerians living on meagre daily incomes, the repeated loss of the session fee, coupled with the anxiety of delayed reversals for the principal sum, is a powerful disincentive. When a crucial financial tool consistently penalises the user for its own operational instability, it fosters distrust and pushes the financially excluded further away from formal banking. Affordability is the bedrock of financial inclusion, and constant, unjustified charges dismantle that foundation.

We note that the CBN and the NCC have issued several circulars mandating prompt reversals—typically within 24 to 72 hours for failed electronic transactions, yet consumer complaints, which the Federal Competition and Consumer Protection Commission (FCCPC) has reported are alarmingly high in the banking and fintech sectors. It shows that the delays persist. The lack of strict enforcement of the “no service, no charge” principle on the USSD fee component suggests a significant gap in consumer protection that service providers are exploiting. It is very unfortunate.

Rather than finding a solution to the problem, the stakeholders have been trading blame. While the banking industry claims that telcos should be held responsible for deductions on failed USSD transactions, the Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, said the operators could not be blamed because they deliver their part of the service at every point of a USSD transaction. Adebayo described the telecom operators as purely vehicles taking the customers to their bank, stressing that whether they get money from the bank or not cannot be the fault of the telcos.

The CBN and the NCC should ensure that complaints of customers regarding failed transactions and charge deductions thereof for USSD are resolved in the interest of the customers, the financial system and the national economy. It is obvious that the USSD crisis demands a decisive regulatory hammer, not just advisory notices. The goal must be to make the system 100 per cent accountable to the end-user. The regulatory framework must be revised to mandate that the USSD access charge (N6.98) be applied only upon successful completion and confirmation of the financial transaction. This places the burden of reliable service squarely on the DMBs and MNOs where it belongs. The CBN must introduce and impose immediate financial penalties on banks that fail to meet the mandated timelines for fund reversals.

Fines should not be a slap on the wrist but a genuine deterrent that forces investment in robust, real-time settlement infrastructure.

Given the fact that the ecosystem involves both banks and telcos, a unified, inter-regulator (CBN, NCC, and FCCPC) platform is needed to quickly resolve disputes over charges and reversals. Customers should not be tossed between their bank’s customer service and their network provider’s desks. It is demeaning and should not be accepted under any condition.

The USSD channel is a national asset in the journey towards a truly cashless economy. Its efficiency and fairness are non-negotiable. Until the system ensures that citizens only pay for the service they actually receive, the dream of a comprehensive financial inclusion in Nigeria will remain perpetually expensive and frustrating for those who need it most. The cost of failure must no longer be borne by the poor customers.