Deposit money banks have reportedly initiated the process of repaying a $132 million (N200 billion) debt owed to telecom operators for the use of unstructured supplementary service data (USSD) for banking services.
The outstanding amount has been a point of contention between the financial and telecommunications sectors for the past six years .
The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) intervened in late 2023 to facilitate a resolution.
Sun Newspaper said that a repayment plan was established during a meeting, and banks have begun settling their debts.
Olayemi Cardoso, governor, Central Bank of Nigeria is credited with playing a key role in pressuring the banks to commence repayment.
However, Gbenga Adebayo, president of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), expressed concerns about the slow pace of repayment.
He highlighted that the debt, which includes both principal and interest, is not decreasing and may even rise if delays persist.
Adebayo urged the banking sector to expedite the repayment process.
The root of the conflict lies in the initial absence of a clear agreement on USSD fee-sharing between banks and telecom operators.
A bank CEO, who requested anonymity, revealed that banks were unaware of the telecom companies’ claim to USSD fees until threats to discontinue the service surfaced.
While telecom companies argued that USSD was a vital service for banks and they should be responsible for collecting and remitting fees, banks saw little financial incentive.
Lower transaction values compared to other channels and the lack of profit from USSD transactions made them prioritize alternative methods.
Now, as the banking sector grapples with security concerns and combats fraud, USSD has become less of a focus.
This shift could potentially slow down further debt repayment.
An anonymous banking expert suggested that telecom companies consider writing off the debt, reflecting a broader industry sentiment of resignation towards the ongoing stalemate. Begin Repayment of N200Bn USSD Debt to Telcos
