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Nigerians transact N1.63tr via USSD

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From a transaction volume of about 145,581,469, Nigerians used the Unstructured Supplementary Service Data (USSD) platform to transfer N1.63 trillion in the last quarter of 2020.

This is according to the fourth quarter (Q4 2020) electronic payment channels report released on Monday by the National Bureau of Statistics (NBS).

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In the report, NBS informed that Q4 volume increased by nine per cent against Q3, while the value rose by 22.64 per cent within the period.

Recall that the USSD has been at the centre of controversy between the Deposit Money Banks (DMBs) and the telecommunications operators, with the latter claiming that the former owed it about N45 billion for the services within the last 10 months.

The banks denied owing, but the mobile network operators (MNOs) have insisted that the DMBs owed them. They disclosed that since the time the crises came to the public, the debt rose from N42 billion to N45 billion.

As such, the telcos insisted that all the debts must be paid adequately. At the thick of the crisis about a month back, the telcos had threatened to disconnect the banks from further having access to the service.

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But the intervention of the Minister of Communications and Digital Economy, Dr. Isa Pantami, and the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, who both asked the telcos not to disconnect the banks with the hope that the matter will be resolved amicably via further meetings.

The CBN and the NCC had in a communique issued at the end of one of the meetings conducted to resolve the disagreement on the USSD fee between the banks and telcos agreed that with effect from March 16, 2021, USSD services for financial transactions conducted at banks and all CBN- licensed institutions would be a flat rate of N6.98k per transaction.

This was to replace the previous per session billing structure, ensuring a much cheaper average cost for customers to ensure financial inclusion.

“To promote transparency, 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 the use of 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,” the communiqué explained.

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Relating the latest NBS figure to the controversy surrounding USSD, an industry analyst, Kehinde Aluko, said the report showed that the banks did make more money, “and now they are refusing to pay the telcos for using their platforms.”

According to him, there are nuances to this telco issue with the banks that are not being explored, still
hanging is the issue of how this backlog will be cleared.

“The truth is that banks have billed and are still billing for USSD; payment is to be by customers going forward. In other words, they are paying twice. Again, it is instructive that the MNOs never stopped the service despite mounting debt, but the minute the banks went into a dispute with MTNN on commission payment, they pulled the plug with total disregard for customers. The intention might have been to hurt MTNN, but they ended up hurting customers to secure their profit. A common theme of disregard for the customers and dishonesty runs through both actions and should be cause for concern. Someone should be exploring it.

“Why are regulators, and indeed government not being put on the spot? Where is FCCPC? Are they afraid of the banks? The action the banks took is the collusion of the highest order and goes to the root of competition and anti-trust; is the FCCPC sleeping and only going after easy prey?

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“While the banks’ actions might have been aimed at MTN, they hurt the customers, purely to protect profits. Who is going to protect the customers?”
FURTHER analysis of the NBS statistics showed that mobile apps transfers (not mobile money), amounted to N9.91 trillion, while direct debits stood at N500 billion as well as transactions by Mobile Money Operators (MMOs), which stood at N4.82 trillion.

Online transfers were also huge with the volume hitting 2.23 billion deals valued at N120.27 trillion in the review period. Payment transactions through the use of cheques stood at N4.20 trillion, indicating 10.28 per cent increase over Q3 while transactions, using Automated Teller Machine (ATM) amounted to N4.54 trillion. Point of Sale (PoS) transactions amounted to N1.52 trillion or a 25.49 per cent increase over the preceding quarter.

In all a total volume of 3,464,811,083 transactions worth N356.47 trillion was recorded on electronic payment channels in the period under review.

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