Banks, telcos resolve 4-year USSD fee standoff as N300bn debt fully cleared

AFTER years of tension and mounting financial claims, commercial banks and telecommunications operators in Nigeria have finally resolved their protracted dispute over unpaid Unstructured Supplementary Service Data (USSD) fees, bringing closure to a crisis that once threatened the stability of the country’s digital financial ecosystem. Nearly N300 billion in outstanding obligations accumulated over four years has now been fully settled, according to industry stakeholders.

The breakthrough was disclosed by Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Mr Gbenga Adebayo, during a visit to the Nigerian Communications Commission (NCC) on Thursday. Mr Adebayo described the resolution as a turning point for both the telecom and banking sectors, noting that the lingering debt had become a systemic risk with far-reaching implications for digital transactions nationwide.

He commended Executive Vice-Chairman of the Nigerian Communications Commission (NCC), Dr Aminu Maida, for playing a pivotal role in facilitating the settlement. According to Mr Adebayo, the NCC boss inherited a deeply strained relationship between banks and telecom operators upon assuming office but moved swiftly to stabilise the situation through structured engagement and coordinated regulatory intervention.

“When Dr. Maida assumed office, he inherited significant industry challenges,” Mr Adebayo said. “One of the most difficult was the USSD debt crisis, a debt burden that grew over four years to nearly N300 billion. It had become a systemic risk to our sector and the digital financial ecosystem.”

READ ALSO: NCC cracks down on telcos as N12.4bn fines loom over service quality breaches

He added that through firm leadership and decisive coordination, the NCC was able to guide both sides toward a sustainable framework. “Today, there is no outstanding USSD debt. The ecosystem has fully migrated to end-user billing. What was once a looming crisis has been converted into a sustainable framework,” he said.

The dispute dates back several years and stemmed from disagreements over who should bear the cost of USSD transactions, a critical channel that allows millions of Nigerians to access banking services using simple mobile phones without internet connectivity. USSD services have been instrumental in expanding financial inclusion, especially among low-income and rural populations.

The 2019 resolution

In 2019, telecom operators signaled that they could no longer continue providing USSD services without proper compensation. They proposed deducting N4.50 per 20 seconds from charges already paid by customers to banks. Financial institutions opposed the move, arguing that it would significantly increase transaction costs by as much as 450 percent and burden customers.

Tensions escalated in March 2021 when telecom operators announced plans to suspend USSD services over an accumulated N42 billion debt owed by banks. The threat raised alarm across the financial sector, prompting intervention by then Minister of Communications and Digital Dconomy, Dr Isa Pantami,who halted the planned suspension.

Shortly after, on March 16, 2021, banks and mobile network operators reached a temporary agreement to adjust the charge payable by customers to N6.98 per USSD transaction. While the arrangement eased immediate pressure, it did not fully resolve the underlying debt accumulation issue

By November 2022, ALTON disclosed that the outstanding USSD debt had climbed to about N80 billion. The figure continued to rise sharply in 2023. On November 16 of that year, telecom operators reported that the debt had surged to N200 billion, up from N120 billion in May.

READ ALSO: Bosun Tijani’s claim that terrorists use special tech to bounce off calls draws criticisms

At the height of the crisis in 2024, total outstanding obligations were estimated at between N250 billion and N300 billion, intensifying concerns about service disruptions and investor confidence in Nigeria’s digital economy.

The full clearance of the debt now signals renewed cooperation between the banking and telecom industries. Industry observers say the transition to a direct end-user billing model is expected to ensure transparency, reduce disputes, and guarantee that telecom operators are promptly compensated for services rendered.

With the crisis resolved, stakeholders hope the focus will shift toward strengthening digital infrastructure, expanding financial inclusion, and deepening collaboration between regulators, banks, and telecom operators to support Nigeria’s evolving digital economy.