A new, simplified billing system has been made possible by the full settlement of thirteen commercial banks’ unpaid dues for Unstructured Supplementary Service Data, USSD, services due to Mobile Network Operators, or MNOs, in Nigeria’s digital financial services.
With more than 95% of their own debts paid off, the remaining three banks are near completion with their payments.
During the MTN Nigeria-hosted “ASK the Exec” virtual session, Engr. Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria, ALTON, made the revelation.
A new billing method for USSD banking transactions is made possible by this resolution. Charges for these services will now be taken straight out of the consumer’s airtime accounts.
During Thursday’s “ASK the Exec” online meeting, which was hosted by MTN, the latest information on debt settlements and the next billing model were covered.
Engineer Gbenga Adebayo and Lynda Saint-Nwafor, MTN’s Chief Enterprise Business Officer, were among the attendees.
The ALTON chairman claims that significant progress has been made in addressing the long-standing debt problem. There was N180 billion in unpaid bank debt to MNOs for USSD services as of January. He told reporters on the call that 13 of the 17 banks with pre-API outstanding liabilities—aside from Heritage Bank, which is insolvent—have paid off their loans in full, and the other three are nearing the end of installment payments. This means that more than 95% of the debt has been paid off.
As this industry transitions to a new operational structure, this substantial repayment of old debt is essential. Adebayo added, “Banks with outstanding debts will not be excluded from the new system; they can choose to stay on the old corporate billing model, provided they settle their outstanding obligations, or migrate to end-user billing once their debts are cleared.”
With the help of their authorities, the banking and telecoms sectors have been working together since 2021 to unify fees for USSD banking transactions, culminating in a single rate of N6.98 per transaction.
“The most significant change is the transition to end-user billing, where customers will now be billed for USSD transactions directly from their airtime accounts instead of their bank accounts,” said Lynda Saint-Nwafor, Chief Enterprise Business Officer at MTN, in an explanation of the impending change. This implies that deductions will now be made from available airtime balances reserved with MNOs rather from the customer’s bank accounts.
In the past, banks would take money straight out of their customers’ bank accounts, which created problems with control and transparency. An Application Programming Interface (API) was created to solve this issue and provide banks complete authority over their USSD channels. With the USSD code *737#, for example, a bank such as GTBank can now verify that a customer’s number is accepted by the bank before a transaction is completed, at which point the N6.98 fee is applied. MNOs, like MTN, merely provide the channel and collect a fee of N6.98 for doing so.
All banks and operators have adopted a common end-user billing procedure to guarantee a seamless transition and uniform experience.
Customers will receive a clear permission message explaining the N6.98 deduction from their airtime and asking for permission when they use the bank’s USSD code.
Aggregator Communication: To avoid paying for services that are not rendered, the MNO will get in touch with a USSD aggregator after approval to verify the bank’s availability.
Transaction and Billing: The MNO connects the consumer and bills the airtime account after the bank certifies that everything is ready.
These are the three paths that the medium and path this will go through. From Customer consent to Aggregator communication and after this is the transaction and billing by the MNOs.
Additionally, all MNOs have standard and uniform messages to consumers, including uniform updates on service quality and transaction results and stating clearly whether a transaction failed because of problems at the bank or the telecom.
Importantly, when clients use direct strings (e.g., dialling 73710000# for N10,000 airtime instead of the general *737#), telecom service purchases (airtime and data) from banks are zero-rated. This makes these transactions free by informing the bank and the MNO of the precise intent. Extensive communication campaigns are planned, and customers are encouraged strongly to utilize these direct strings in order to avoid charges. The customer’s bank should be notified of any double deductions (from both bank accounts and airtime).
Adebayo answered a number of important points while assuring the public of the consequences for both consumers and companies. He pointed out that since customers were already paying the N6.98 fee, albeit from their bank accounts, the switch to end-user pricing had no net cost impact on them.
Standardized consent messaging, inter-industry agreements, and MNOs’ promise to give regulators monthly performance data all contribute to increased transparency and accountability.
The chairman of ALTON further clarified: “The customer will not be billed or any deduction would be reversed if a transaction fails because of MNO network concerns. The consumer will still be billed, though, and the cause for the failure will be explained, if the failure comes at the bank’s end (for example, an inadequate bank balance or a system outage).
There was also discussion on the issue of USSD usage restricting access for people without airtime or in unbanked areas. “The N6.98 fee is significantly less expensive than other ways to get to actual banking locations. Additionally, if a customer has money in their bank account, they can use direct strings to buy airtime from their bank accounts for free, even if they don’t have any airtime. All parties involved contribute to the cost of delivering financial services, and USSD is viewed as a convenient channel, Adebayo said.
Discover more from TechBooky
Subscribe to get the latest posts sent to your email.