More controversies as Banks USSD debts to telcos hit N47 billion

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The total debts owed by banks to telecommunications service providers arising from the use of Unstructured Supplementary Service Data (USSD) have risen from N42 billion to N47billion.

USSD is a Global System for Mobile Communications (GSM) protocol that is used to send text messages. USSD is similar to Short Message Service (SMS) but in the banking industry, allows users without a smartphone or data and internet connection to do mobile banking through the use of codes. USSD-based mobile banking can be used for fund transfers, checking account balance, generating bank statement, among other uses.

The huge debts came as a result of deductions made by way of commission by the banks during the course of banking transactions but were never remitted to the telecoms operators that own the infrastructure on which the transactions rode.

An industry source, who spoke on condition of anonymity, lamented the helplessness of the operators to take a decisive action on the issue.

“The debts have grown sharply from N42 billion to N47 billion and it will continue to grow because bank customers will continue to use our platform to carry out convenient banking services. The impact of the N47 billion debt on the industry is significant, especially now that private and public organisations are counting the cost of the COVID-19 pandemic,” the source said.

According to the source, banks are emboldened by the support they are getting from the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, adding that it is that support that has bred impunity.

“Unfortunately, after the last spat we had the Minister of Communications and Digital Economy, Dr Ibrahim Pantami, Emefiele, the banks CEOs and the MNOs met  to settle the matter. The resolution was that the status quo ante be retained.This regulatory intervention has tied the hands of the MNOs because they would not want to be seen as being recalcitrant. The MNOs wish they too could get the type of support the banks are getting,” the source added.

Early last month, the banks denied being indebted to MTN Nigeria and other MNOs for using telecommunication platforms to provide payment services.

“There is no such thing as an obligation due from banks to telcos. We chose not to make a public statement out of it because it is not appropriate for us to be found fighting with telcos in public,” Chief Executive Officer of Access Bank Plc, Herbert Wigwe, had said on an investor call in Lagos.

READ ALSO:USSD: Nigeria banks owe MTN N40.3 billion

Wigwe is the head of a team of bank CEOs that has been in discussion with MTN Nigeria to resolve a dispute that led some banks to cut off the company from their banking platforms last week. This was after MTN, the West African nation’s biggest telecom services provider, reduced a commission charged on airtime purchases through banking channels by almost half to 2.5 per cent.

The Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, had maintained that at a meeting with CBN and the Nigerian Communications Commission (NCC) terms of the settlement had been discussed and would be agreed in an MoU with both regulators.

“We also don’t want to join issues with the banks but the fact remains that the banks used the USSD channels over more than a year without paying and they can’t deny that the USSD channels services were not made available to them by the telcos.

“The banks debited their customers for use of the USSD channels and they did not pay the telcos for the use of the services.

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