Banks Rush To Settle USSD Debt As January 27 Deadline Nears

Several commercial banks in Nigeria are making last-minute efforts to clear their outstanding Unstructured Supplementary Service Data (USSD) debt before the January 27 deadline. The move comes as telecom operators prepare to disconnect banks that fail to meet their financial obligations.

Industry sources confirm that some of the affected banks have begun partial payments, while others are now engaging in negotiations—an apparent shift from their previous stance before the disconnection threat became imminent.

Telecom operators blame regulatory delays for the accumulation of the debt, which has reportedly reached about N160 billion. They argue that earlier action from the Nigerian Communications Commission (NCC) could have prevented the situation from escalating.

USSD banking remains a crucial service for millions of Nigerians, providing easy access to financial transactions such as fund transfers, bill payments, and airtime purchases via mobile phones. Any disruption to these services could significantly impact customers, especially those in areas with limited internet access.

Beyond the risk of service disconnection, the NCC has also warned that it will revoke the shortcodes allocated to the nine banks in question if they fail to clear their debt by January 27.

A telecom industry insider, speaking anonymously, reveals that the affected banks are now taking the matter seriously due to potential revenue loss and customer dissatisfaction.

“Some banks have started paying in installments because they understand the consequences. Those that previously ignored the issue are now requesting negotiations,” the source states.

“This is something they could have addressed much earlier, but without regulatory enforcement, they did not feel compelled to act,” the insider adds.

Another industry stakeholder criticizes the telecom regulator for allowing the debt crisis to persist, attributing the delay to excessive caution.

“The regulator has been too lenient. If we had been allowed to act earlier, the banks would have started paying long ago,” the stakeholder argues.

“The same issue applies to tariff adjustments. Despite the need for price reviews, the regulator has hesitated, keeping tariffs unchanged for over a decade, which now threatens the financial health of the telecom sector,” he adds.

Reports indicate that while some banks have been settling their debts since last year, the nine listed banks failed to comply with the resolution set by the NCC and the Central Bank of Nigeria (CBN). Their current response appears driven by concerns over revenue losses.

In December 2024, the NCC and CBN issued a joint circular outlining clear debt repayment guidelines. The directive, signed by key officials from both agencies, specifies that banks must:

• Pay 85% of all outstanding invoices issued after implementing Application Programming Interfaces (APIs) by December 31, 2024.
• Settle 60% of pre-API invoices as a full and final payment.
• Ensure all future invoices are settled at 85% within one month of issuance.
• Agree on lump sum or installment payment plans with telecom operators by January 2, 2025, with full repayment by July 2, 2025.

The ongoing dispute between banks and telecom operators over USSD charges has been a major challenge in Nigeria’s financial and telecommunications sectors. Key points of contention include the pricing model, transparency of deductions, and responsibility for outstanding payments.

• In March 2021, banks and telcos agreed to a USSD session fee of N6.98 after regulatory intervention.
• However, reports indicate that some banks have been deducting this fee from customers without remitting payments to telecom operators.
• With the recent directive, the NCC has authorized telecom companies to disconnect banks that fail to comply by January 27.

The banks at risk of disconnection include Fidelity Bank, First City Monument Bank (FCMB), Jaiz Bank, Polaris Bank, Sterling Bank, United Bank for Africa (UBA), Unity Bank, Wema Bank, and Zenith Bank.

As the deadline approaches, all eyes remain on whether the banks will fully comply or risk losing access to a crucial financial service used by millions of Nigerians.