The ongoing clash between telecommunication firms and banks over the N120 billion Unstructured Supplementary Service Data (USSD) debt has taken a new turn.
Telecommunication companies have now declared that they will not show leniency and forgive the outstanding debt owed by banks.
The Chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, made this revelation. He emphasized that banks must fulfill their obligation by paying off the debt and warned that disconnection of banks from USSD services would be the consequence if they failed to comply, even after all attempts at resolving the issue had been exhausted.
Adebayo disclosed that despite the disconnection notice previously issued by banks to telecom operators, the banks have yet to respond positively, thus endangering the continuation of USSD services for financial transactions.
“There has been no progress, and we are going to go ahead,” Adebayo stated firmly.
“The parties are now following the terms of the agreement between them. Appropriately, each will enforce the disconnection when the time is appropriate. But I can’t say to you that the problem is solved, and I can’t say to you that the problem will go away. For those who are thinking that the banks will not pay, and the operator will forgive it, that will never happen. The sums involved must be paid a hundred per cent. We are not backing down.”
Adebayo insisted that the telecoms industry would maintain its stance, pressing for payment or the disconnection of services.
He argued that banks held a moral obligation to settle the debt, considering they had been collecting fees from their customers for the USSD service.
“The banks have the moral obligation to pay,” he emphasized. “You can see what is happening, that people are being held to account because these are services that are rendered and paid for. They deduct money from users of the channel, whereas the money due to the operator is not remitted. They are taking money from the bank account of users already. They have the moral burden to pay the debt, and it is not going away.”
Adebayo also confirmed that the disconnection process was already underway, and the telecoms industry would take the necessary actions when the situation demanded it.
This disagreement between banks and telcos regarding USSD payment has been ongoing since 2019. Initially, telecom operators claimed that banks owed them N32 billion, but the debt has since escalated to N120 billion.
USSD remains a critical financial infrastructure for many Nigerians, as only about 44% of the population owns smartphones, according to the Alliance for Affordable Internet. In 2020 alone, a staggering 762.19 million transactions were conducted using USSD, as reported by the Nigeria Inter-Bank Settlement System Plc.
The future of USSD now hangs in the balance, particularly after the Chief Executive Officer of Guaranty Trust Holding Company expressed his opinion, stating, “USSD is a clumsy technology. It’s not state-of-the-art. The best way to have financial inclusion is to crash the cost of data so that data becomes more affordable. Then we can use what is a superior technology.”
As the battle for the payment of USSD debt intensifies, the telecoms industry and banks find themselves at a crossroads, with the fate of this widely utilized financial service hanging in the balance.
