Four-Year N300bn USSD Standoff Ends, Resetting Ties Between Banks and Telcos

Olufemi Adeyemi

A long-running financial dispute that strained relations between Nigeria’s banking and telecommunications industries has finally been resolved, with nearly N300 billion in unpaid Unstructured Supplementary Service Data (USSD) fees now fully settled. The development marks a significant turning point for two sectors that jointly power the country’s fast-growing digital payments ecosystem.

The resolution was confirmed by the Association of Licensed Telecommunications Operators of Nigeria (ALTON) during a recent engagement with the leadership of the Nigerian Communications Commission (NCC). For years, the mounting debt had been a source of friction, regulatory intervention, and industry-wide uncertainty.

How the Debt Snowballed

USSD technology remains a backbone of financial inclusion in Nigeria. It allows customers to transfer funds, check balances, pay bills, and carry out other banking transactions using simple short codes on basic mobile phones—without internet access. This makes it indispensable in rural communities and among low-income users.

Under the previous billing arrangement, banks were responsible for paying telecom operators for USSD sessions initiated by their customers. However, disagreements over tariffs, reconciliation processes, and delayed remittances led to a steady build-up of unpaid charges. Over four years, the outstanding amount climbed to nearly N300 billion.

According to ALTON Chairman Gbenga Adebayo, the debt burden created serious cash flow challenges for telecom operators, who continued to maintain network infrastructure and deliver services despite not being fully compensated. The situation also introduced systemic risks into Nigeria’s digital finance space, raising concerns about service disruptions and investor confidence.

By the time Dr. Aminu Maida assumed office as Executive Vice Chairman of the NCC, the issue had become one of the most pressing regulatory challenges in the communications sector.

Regulatory Intervention and Policy Shift

The breakthrough came after sustained negotiations involving telecom operators, deposit money banks, and regulators. Central to the resolution was the transition to an End-User Billing (EUB) framework in mid-2025.

Developed by the NCC with support from the Central Bank of Nigeria (CBN), the EUB model fundamentally altered the payment structure. Instead of banks acting as intermediaries responsible for settling USSD charges, customers now pay directly from their mobile airtime. This change effectively removed the bottleneck that had allowed debts to accumulate.

Migration to the new model began between June 3 and June 18, 2025, after partial repayments of N171 billion were made toward the outstanding balance. By February 19, 2026, the remaining debt had been cleared, closing a contentious chapter in the relationship between both sectors.

What the New Model Means for Consumers

Under the EUB framework, customers are charged N6.98 for every 120-second USSD session. Before any deduction is made, users receive a consent prompt detailing the charge. Additional safeguards have been introduced to prevent double billing, and customers retain the right to opt in or out of USSD banking services.

Banks are also mandated to notify customers about applicable session charges, ensuring greater transparency in how fees are applied.

While some consumer advocates have expressed concerns about the effect of airtime deductions on low-income Nigerians, regulators argue that the new system enhances clarity and predictability. Unlike the previous arrangement—where charges were sometimes disputed between banks and telecom providers—the EUB structure makes payment immediate and traceable.

Strengthening the Digital Financial Ecosystem

Industry analysts believe the resolution brings much-needed stability to Nigeria’s digital economy. For telecom operators, it guarantees revenue certainty and reduces exposure to prolonged payment disputes. For banks, it removes a recurring liability from their books and simplifies operational processes.

More broadly, the settlement reinforces confidence in regulatory coordination between the NCC and the CBN, demonstrating the ability of institutions to address systemic risks through policy reform and stakeholder engagement.

The USSD channel remains a critical pillar of Nigeria’s financial inclusion strategy, especially in areas with limited broadband penetration. By resolving the N300 billion impasse and standardising billing practices, regulators have helped safeguard a service relied upon by millions daily.

With the dispute now behind them, both industries are expected to refocus on innovation, service expansion, and collaborative growth—key ingredients for sustaining momentum in Nigeria’s evolving digital payments landscape.