Telcos Threaten to Withdraw USSD Services Over Banks’ Misinformation on Charges

Telecom operators in Nigeria, including MTN, Airtel, Globacom, and 9Mobile, have threatened to withdraw network support for banks’ USSD (Unstructured Supplementary Services Data) services amid accusations of misinformation by the banks regarding transaction fee deductions.

USSD, widely used for bank transfers via short codes on mobile phones, recently became the center of controversy after banks informed customers that the Nigerian Communications Commission (NCC) directed them to stop deducting USSD transaction charges from bank accounts. Instead, banks stated that charges would now be deducted directly from users’ mobile airtime.

In a notice to customers, banks announced that from June 3, 2025, USSD charges would no longer come from bank accounts but be billed by telecom operators at a rate of ₦6.98 per 120 seconds. The notice also promised that customers would receive a consent prompt before airtime deduction, allowing them to opt out of the service if they wished.

However, the Association of Licensed Telecom Operators of Nigeria (ALTON), representing the telecom companies, quickly condemned the banks’ notice as deliberately misleading. ALTON chairman Engr Gbenga Adebayo clarified that the NCC never issued such a directive on its own but that the new billing model was part of a joint regulatory agreement involving the NCC, the Central Bank of Nigeria (CBN), the banks, and the telecom operators.

According to Adebayo, the agreement allows banks to switch to the end-user billing model only if they fully clear outstanding USSD debts owed to the telecom companies by June 2, 2025. He emphasized that some banks have cleared their debts, but most have not, making any migration to the new billing model impossible at this time.

He further explained that the agreement was designed to prevent customers from being charged twice—once from their airtime and again from their bank accounts. Given the banks’ failure to fulfill their obligations, ALTON warned that telecom operators might withdraw support for USSD banking services altogether, stating that the banks could operate without USSD if they do not honor the agreed terms.