MTN’s Planned Charges on USSD Banking Services

The Mobile Network Operator MTN sent messages on Sunday to its over 60 million subscribers in Nigeria informing them of its planned charges on USSD Banking services to be effective from October 21, 2019.

The message reads thus: “Yello, as requested by your bank from Oct 21, we will start charging you directly for USSD access to banking services. Please contact your bank for more info.” MTN also sent another message “Yello, Please note that from Oct 21, we will charge N4 per 20 seconds for USSD access to banking services. Thank you”.

The proposed charge has resulted in an uproar among Nigerians who complained of excessive charges from the banks and the telecoms.

Existing Charges on USSD Banking Services

Banks already charge N50 for USSD banking services such as transferring money between two accounts in different banks using codes like GTB’s *737#, Fidelity’s *770#, First Bank’s *894#, UBA’s *919#, and Access Bank’s *901#. Some banks even charge more than N50.

In view of the already existing charges, introducing another charge is clearly burdensome on Nigerians.

Reason for the N4 USSD Charge

MTN claims that it is introducing the additional charge in order to raise funds to maintain the unstructured supplementary service data (USSD) infrastructure platform. What happens to the already existing N50+ charge? Couldn’t a part of it be used for servicing the platform?

According to an industry source, the decision to impose the additional charge was made by banks’ chief executives because they are not willing to share the N50 charge with the telecom companies.

Some sources even allege that it could be another avenue for the Nigerian government to make extra money from the industry.

Nigerians all over the social media and beyond express outright disapproval of the charge stating that both the telecoms and the banks impose humongous charges without necessarily providing any valuable service.

The Federal Government’s Take on the Issue

In the heat of the issue, the attention of the Minister of Communication, Dr. Isa Ali Pantami, was drawn to the issue by some twitter users.

Dr. Pantami, who claimed to be officially oblivious of the issue promised to ensure that the operators suspend such action. Commenting about the incident, Dr. Pantami’s spokesperson, Mrs. Uwa Suleiman said:

“The office of the Honourable Minister of Communications Dr. Isa Ali Ibrahim Pantami FNCS, FBCS, FIIM is unaware of this development and has hereby directed the sector regulator, the Nigerian Communications Commission (NCC) ensures the operator suspends such plans until the Honourable Minister is fully and properly briefed.”

At a news briefing in the just-concluded World Bank/IMF Annual Meeting in Washington, The CBN Governor, Mr. Godwin Emefiele narrated a meeting he held with the telecoms and the banks four months ago in which he had loggerheads with the bank and telecom stakeholders.

Mr. Emefiele said that the use of USSD is a sunk cost, insisting that it is not an additional cost on the telecom’s infrastructure but the telecom companies disagreed with that. However, the CBN Governor told the banks that they would not allow them to add an extra charge on USSD transactions.

“I have told the banks that they have to move their business, move their traffic to a telecom company that is ready to provide it at the lowest possible if not zero cost.”, Mr. Emefiele said.

Bank’s Reactions to the Issue

When contacted by several of their customers, most banks denied being a party to the proposed charge.

Both First Bank and Access Bank denied consenting to the charges, stating that they will inform their customers if there is any charge in their services.

In reaction to a customer’s tweet, Access Bank said: “Our fees and charges on the USSD service remain unchanged, and all our services are available”.

However, some Nigerians complain that banks like Zenith bank deduct additional money on the USSD service.

MTN’s Reaction to the Issue

In response to the ministerial order, MTN insisted that neither CBN nor NCC and not even the Ministry can stop them. The telecom company vows to continue with the USSD charges insisting that the USSD charges are already being carried out other telecoms.

The telecom giant said it is licensed to carry out business operations and has not broken any rule.

The implication of the USSD charge is huge. With the N4 per 20 seconds charge, the telecom giant would be charging N12 per minute. In other words, it could be making up to N5.58 billion per month via the charge on USSD banking services.

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