Connect with us

Financial

Nigerian Telcos To Discontinue Banks’ Use of USSD Over N42 Billion Debt

Published

on

, SiliconNigeria

Nigerian mobile network operators are set to discontinue from Monday March 15, 2021, the use of Unstructured Supplementary Service Data (USSD) short code service by some Financial Service Providers (FSPs) over N42 billion debt owed them in the past eight months.

 The Telcos under the aegis of Association of Licenced Telecommunications Operators of Nigeria (ALTON) which comprises Network Operators, Infrastructure Companies and Value Added Services Providers, said since the USSD Pricing determination by the Nigerian Communications Commission (NCC) which resulted in a price review of USSD service by its members, banks are yet to pay them accumulated USSD transactions costs.  

, SiliconNigeria

According to ALTON, the NCC’s updated pricing methodology for USSD services for financial transactions in Nigeria. explicitly restricts Mobile Network Operators (MNO’s) from charging the end user for the services and mandates the banking sector to enter into negotiations to settle outstanding obligations and agree individual pricing mechanisms to be applied going forwards.

A statement jointly signed by Engr. Gbenga Adebayo, Chairman and Gbolahan Awonuga, Head of Operations of ALTON respectively states that:

“ALTON is aware of the letter issued by the Minister of Communications and Digital Economy to the Central Bank of Nigeria, seeking a resolution to the on-going dispute between the banking sector (Financial Service Providers (FSPs)) and the telecoms sector over the appropriate methodology to use to charge for USSD services.

“The background to this problem was that in order to accelerate the adoption of financial services on USSD, the Financial Service Providers (FSPs) partnered with our members to zero-rate the USSD access to end-users, while they bore the cost for the provision of service.  Based on this arrangement, the banks took on the responsibility of billing customers and paid our members for use of the USSD infrastructure from the service fees deducted from the customer’s bank account.

“Following the issuance of the USSD Pricing determination by the Nigerian Communications Commission (NCC) which resulted in a price review of USSD service by our members, the banks decided that they would no longer pay for USSD service delivered to their customers and requested our members to charge customers directly for use of the USSD channel.

“This billing methodology where the Financial Service Providers (FSPs) customer is directly charged USSD access fees by our members irrespective of the service charges that the bank may subsequently apply to the customers’ bank account is called “End-User Billing” which the banks specifically demanded that all our members implement. The banks, however, provided no assurances to our members that such service fees charged to customers’ bank accounts for access to bank services through the USSD channel would be discontinued post implementation of end-user billing by our members.

“The removal of these service fees by the Financial Service Providers (FSPs) would have meant that if bank customers were charged only the USSD costs communicated by our members per USSD session, bank customers will be paying far less than what they are currently being charged by the Financial Service Providers (FSPs) which in some instances are as high as N50.  Additionally the banks and telcos will be applauded for collaborating towards the financial inclusion objectives of the Federal Government.

 “It has been more than eight (8) months since the Nigerian Communications Commission (NCC) issued an updated pricing methodology for USSD services for financial transactions in Nigeria. The methodology explicitly restricts Mobile Network Operators (MNO’s) from charging the end user for the services and mandates the banking sector to enter into negotiations to settle outstanding obligations and agree individual pricing mechanisms to be applied going forwards.

“During this time, Mobile Network Operators (MNO’s) have continued to provide access to USSD infrastructure and our members have continued to pay all Bank charges and fees to access the Banking industries assets and customers, despite the fact that obligations due from banks to telecoms companies for USSD services has reached over Forty-Two Billion (N42B) Naira.

“ALTON members have continued to provide these services because our primary concern is that the millions of Nigerian customers who access financial services through our USSD infrastructure every day should be able to continue conducting their transactions. This was given greater importance when customers’ became further reliant on these services due to COVID movement restrictions. Unfortunately, as it has been impossible to agree on a structure for these payments with the banks that do not involve the end-user being asked to pay, the government has been forced to intervene to ensure that a sustainable cost-sharing solution is agreed, that does not disadvantage the consumer in the long-term.

“We deeply regret that we have reached a point where the withdrawal of these services has become unavoidable, however, we remain committed to working closely with the relevant Ministries and regulators to resolve this issue as quickly as possible. To minimise the disruption to customers, and with the concurrence of the Honourable Minster of Communications and Digital Economy and the Nigerian Communications Commission, on the huge debt to the Network operators; Mobile Network Operators will disconnect debtorFinancial Service Providers (FSPs) from USSD services, until the huge debt is paid.

“Therefore, our members are initiating a phased process of withdrawal of USSD services, starting with the most significant debtors within the Financial Service Providers (FSPs) effective Monday March 15, 2021. While the withdrawal of USSD service is in place, we encourage our subscribers to kindly explore alternative channels with their Banks,” ALTON statement concluded.

Continue Reading
Advertisement Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Financial

Nigeria’s SEC Grants Volition Cap License to Kickstart Fund Management 

Published

on

, SiliconNigeria

Volition Cap, an asset management company empowering the hardworking middle-class to create wealth, announced today that it has secured a fund management license from the Nigerian Securities and Exchange Commission (SEC), as of December 2022.

This license allows the company to operate as a registered fund manager in Nigeria, as it prepares to launch a suite of retail and institutional investment products for Africans living on the continent and in the Diaspora.

Founded in 2018, Volition Cap is a game-changing asset manager that leverages traditional cooperatives, a model it created through Volition Cooperative, a licensed multi-purpose cooperative making investing stress-free for its members.

By leveraging technology to distribute products, Volition Cap will reduce the cost of investment services and the challenge of easy access. With the credibility and trust that an SEC license confers, this home-grown business is poised to scale its bespoke products across Africa and the Diaspora.

Subomi Plumptre, CEO of Volition Cap, said, “Our company was founded by entrepreneurs who truly understand the daily struggles of the middle class. From our operation’s inception, we have focused on empowering this group to attain financial success. The SEC license is a significant milestone for us as we introduce retail and institutional products to drive economic growth.” 

Continue Reading

Financial

QNET Creates Initiative To Increase Financial Inclusion In Youth Communities 

Published

on

, SiliconNigeria

Global e-commerce based direct selling company, QNET is working to increase financial inclusion in youth communities through its signature educational programme called FinGreen.

FinGreen aims to boost financial inclusion in underserved communities by empowering individuals with the skills required to be financially confident, aware, and savvy through its three pillars: assessing target communities, training them, and transforming participants into financial literacy advocates.

One of the programme’s first ambassadors, Anuoluwapo Ayoola, is sharing her newly gained financial skills and knowledge with 70 university students at a workshop she organised in Abuja about educating other young people about the importance of financial literacy as an essential life skill.

She said, “I am thrilled to have organised a financial literacy workshop at the University of Abuja, with the generous support of QNET. Financial literacy is not just about managing money. It’s about creating a better future for ourselves and future generations. As an ambassador of FinGreen, I’m excited for more opportunities to educate my peers on why financial education and literacy are so important!”

Ayoola based her financial literacy workshop on campus at the University of Abuja on the insights and understanding she gained as part of the pilot cohort to complete the first phase of FinGreen trainings, which kicked off in Nigeria in June of 2022. She designed the first module of her workshop to challenge the assumptions on financial literacy, educating the 70 participants on how they can adjust their mindset to utilise financial knowledge for their benefit.

The second module drew on Ayoola’s experience as a student, where she shared practical strategies and tips on how participants can manage their finances as students and as working adults. This will be crucial to help participants manage their financial sustainability and investment, seeing as many Nigerian students bear significant debt due to the increasing cost of tertiary education.

Mr. Biram Fall, the regional general Manager of QNET Sub-Saharan Africa, said, “We are honoured to support Anu Ayoola and the University of Abuja’s Financial Literacy Workshop. With the constantly shifting financial landscape and the digitisation of financial services, young people need to be equipped with the necessary knowledge and skills to make informed decisions about their money. Not just that, we want to continue helping young people, like Anu Ayoola, develop critical thinking and problem-solving skills and foster a sense of responsibility and leadership through FinGreen.”

Continue Reading

Financial

US Investigates Mastercard Debit Card Programme

Published

on

, SiliconNigeria

Mastercard says the Department of Justice is investigating potential anticompetitive behaviour related to its debit card operations.

In an SEC regulatory filing, the payments giant says that last month it received a civil investigative demand from the DoJ seeking documents and information regarding a potential violation of the Sherman Act, a competition law.

“The CID focuses on Mastercard’s US debit program and competition with other payment networks and technologies,” says the filing.

In 2021, the DoJ began a similar investigation into Visa and whether the company had restricted the ability of merchants to send debit transactions through less expensive networks.

According to Bloomberg, in January the justice department issued more CIDs to Visa seeking additional documents and information.

Mastercard CFO Sachin Mehra tells Bloomberg: “It’s not surprising that the DOJ would request information from other players in the debit space.”

Continue Reading

Popular News