Fresh reports have emerged showing how Banks asked Telecommunications Service Providers to charge subscribers for USSD transactions in a leaked memo. This is contrary to the denial by Banks who claimed they were not aware of the new development.
Recall, MTN sent a message to its customers on Sunday informing them of the new charges on USSD transactions. The message reads: “Please note that from Oct 21, we will charge N4 per 20 seconds for USSD access to banking services. Thank you.”
According to a report obtained from the Cable, The banks said the decision “on whether, and what amount, to charge a customer for accessing USSD is entirely that of the telecoms company, in the same way, a customer is billed for calls, SMS and data”.
This was contained in a letter by the Body of Banks’ Chief Executive Officers (BOBCEO) dated September 16, 2019 which was addressed to the Association of Licensed Telecommunications Operators of Nigeria (ALTON), the bank MDs made a proposal for “orderly implementation” of end-user billing for bank customers, “aligning with the standard practice for USSD billing.”
According to BOBCEO, “Customers using non-bank services already pay for USSD sessions.”
The BOBCEO letter was signed by 13 banks.
However, the Minister of Communications Isa Ali Ibrahim Pantami suspended the charge when he got wind of the new development.
Read the Full Memo obtained from The Cable
The Bank CEOS’ Letter in full
Re: Anti-competitive practices on Reverse Corporate Billing for Bank USSD Services
We write with reference to instructions to our USSD aggregators, demanding Banks to subscribe to corporate-level billing for USSD services.
The demand forces us to a level where we will pay N4.5 per USSD session of 20 seconds, amounting for (to) around 450% increase in tariff. Many transactions extend to two or three sessions. This is a cost that will destroy the financial inclusion strides made by banks where we have included almost 20m more citizens in the financial system by building services that run on USSD. Our partnership spirit and recognition of USSD as a critical national asset to drive financial inclusion has served all stakeholders well, especially those previously excluded Nigerians.
Beyond the huge cost-per-session, this would render the laudable financial inclusion initiatives of the Federal Government of Nigeria unsustainable which would impede development and economic growth. We will resist the move to reverse billing by multinational telecomms companies for the good of our National agenda. Reverse billing gives no visibility to on actually sessions used forces to pay for failed sessions and leaves us exposed to spurious USSD usage that will increase costs.
We are proposing an orderly implementation end-user billing for bank customers, aligning with the standard practice for USSD billing. Customers using non-bank services already pay for USSD sessions. It forces cost transparency between the Telecoms Company and customer, and will ensure the customer demands a reliable service that works when they need it at a price they can afford. In the Reverse Corporate Billing situation we are unable to attain competitiveness nor transparency.
We trust that on understanding our concern, and the perilous impact that your stated actions will have on the National Financial Inclusion Strategy, you will implement end-user billing to ensure customers have a fair deal and a choice. Our relationship until this juncture has been a symbiotic one that benefits the millions of users of cost-effective banking solutions, the banks and the telecom companies for whom Bank channels have become one of the biggest sellers of airtime using the same USSD channels and other applications or integrations. If USSD services are used to ransom banks into exiting our financial inclusion goals, everybody will lose out – most notably the vulnerable, financially excluded Nigerian.
We look forward to immediate dialogue and appreciate your response by Monday 23rd September. Yours faithfully,
Bank CEOs of Nigeria.