Telecommunications operators in Nigeria can now directly access revenue generated from Unstructured Supplementary Service Data (USSD) services, thanks to a new billing framework jointly approved by the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN).
The newly introduced End-User Billing (EUB) system allows major mobile network providers MTN, Airtel, 9mobile, and Glo to deduct USSD service fees straight from subscribers’ airtime balances. This eliminates banks from their previous role as intermediaries in the payment collection process.
Mobile operators had raised concerns over banks collecting USSD fees without remitting payments, despite providing over N200 billion worth of USSD services by the end of 2024. “Before now, banks would deduct the money from our accounts and fail to remit it to the telcos. It was always a problem,” said Adeolu Ogunbanjo, President of the National Association of Telecom Subscribers (NATCOMS), during a recent press briefing.
Under the revamped framework, subscribers will be charged N6.98 per USSD session, lasting up to 120 seconds, but only after receiving an opt-in prompt to approve the deduction.
Ogunbanjo described the End-User Billing model as a long-overdue reform that enhances transparency and accountability within the telecom sector. His remarks followed the rollout announcement by the Association of Licensed Telecom Operators of Nigeria (ALTON). Several commercial banks, including GTB, UBA, and FCMB, have already informed their customers that USSD transaction fees will now be deducted directly from airtime balances.
The NATCOMS president praised the NCC for spearheading the reform alongside the CBN and expressed optimism that the new model would motivate telecom operators to improve service quality. “Hopefully, the telcos will now use this to develop the telecom sector so that we won’t be having poor-quality services,” he added.
The dispute over USSD billing began in 2019, when telecom companies accused banks of defaulting on payments for services rendered. This led the CBN and NCC to intervene in 2021 with an interim solution: a flat-rate charge of N6.98 per USSD session, collected by banks on behalf of telcos.
Despite this, compliance was inconsistent, and telcos threatened service disruptions and possible disconnections of banks that owed them money.
ALTON Chairman Gbenga Adebayo hailed the transition as a significant milestone in Nigeria’s digital financial ecosystem. “It aims to establish a transparent, sustainable, and customer-centric model for USSD service delivery,” he said.
Adebayo also assured customers that USSD services would continue uninterrupted, with existing transaction codes for balance inquiries, fund transfers, and bill payments remaining active. He advised users facing issues to contact their mobile operators, while transaction-specific problems should be directed to their banks.
USSD remains a crucial tool for promoting financial inclusion, especially for Nigerians in rural and underserved communities without access to smartphones or internet-enabled devices. With direct billing now aligned with subscriber consent, industry stakeholders expect increased trust and efficiency throughout Nigeria’s digital finance sector.
A joint circular issued by the CBN and NCC on December 20, 2024, stipulates that the end-user billing switch will only be activated for banks and telcos complying with the agreed payment terms. To resolve historical debts, banks must pay 60% of old bills by January 2, 2025; clear all pre-existing bills by July 2, 2025; and settle 85% of new bills by December 31, 2025.
