Telecommunications subscribers in Nigeria may soon notice a change in how they’re charged for using Unstructured Supplementary Service Data (USSD). Rather than being billed by banks, customers will begin to see direct deductions from their airtime balance when they use USSD services for mobile banking and other transactions.
This follows advanced discussions between mobile network operators (MNOs) and deposit money banks (DMBs) to transition to an end-user billing model. This model means that the cost of USSD sessions will be deducted straight from the user’s mobile credit, rather than being covered by the banks or passed on through account charges.
According to Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), this change is being carefully planned to avoid disruptions. “We’re working with the banks to ensure a smooth migration,” he said, adding that this approach would help avoid further USSD-related debt between banks and telecoms.
The shift represents a departure from the long-standing corporate billing system, where banks were invoiced for USSD usage and often delayed payment—leading to billions in accumulated debt.
As background, the debate over who should bear USSD costs dates back to 2019, when banks initially resisted a proposal to split revenue with telcos. Telcos had suggested charging N4.50 per 20 seconds of USSD use from the fees collected by banks, but the banks argued it would increase costs significantly.
Fast-forward to 2021, subscribers began paying N6.98 per USSD transaction, a result of unresolved disagreements between banks and telcos.
Now, regulators have stepped in with firm deadlines. In a joint circular, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) directed DMBs and MNOs to settle their outstanding bills and agree on a new payment structure by January 2, 2025. Full payments or equal monthly instalments must be completed by July 2, 2025.
Additionally, from now on, any USSD session lasting under 10 seconds will not be billed, and prepaid DMBs will be eligible to migrate to the new billing framework once regulatory approvals are in place.
Ultimately, this transition to end-user billing is aimed at creating a more sustainable and transparent model—ensuring that customers, banks, and telecom operators all operate on clearer financial terms.
