Contrary to information in the public domain that the telecommunications operators have suspended the use of the Unstructured Supplementary Service Data (USSD) for airtime purchase, the banks were the ones which unilaterally stopped the service, various sources have disclosed to Newsbreak.
The disclosure follows reports on Friday which insinuated that telecom operators had barred subscribers from airtime purchase via USSD.
For example, MTN, the largest telecoms operator in the country, on Friday, sent a message to its subscribers, saying: “Dear Customer, our bank recharge channels are currently unavailable. Kindly recharge using physical cards. We apologise for the inconvenience. Thank you.”
But speaking exclusively to Newsbreak, various sources familiar with the crisis, said MTN was forced to send the message due to the sudden unavailability of the USSD service to subscribers.
According to a source, the banks single-handedly suspended the various USSD payment options without informing the telecom operators, partly due to the lingering N42 billion owed by the former and which they have refused to pay.
“The banks did not send a formal communication to customers before taking this action.
“The sudden suspension of airtime sales by some of the banks is not restricted to USSD channels alone, but includes airtime purchases through all banking channels – bank apps, bank USSD codes, even debit cards,” the source said.
The Nigerian Communications Commission (NCC) had on 11 March disclosed that the money deposit banks are owing the telecom operators N42 billion, admitting that it has been a continuous issue between the telcos and the banks.
Professor Umar Danbatta, Executive Vice Chairman of the NCC, while speaking at an event, explained that the telecommunication companies provide the infrastructure which the banks leverage to provide various banking services.
“It is expected that for this service, someone should pay. It is expected that they (telcos) will recoup their investments in order to continue and to expand the service,” Dambatta said.
But despite the intervention by the NCC, Dr. Isa Pantami, Minister of Communications and Digital Economy; and the Central Bank of Nigeria (CBN) on a settlement plan for outstanding payments as announced on 16 March, the telecoms source said the banks are still evading payment of the massive debt.
The source explained that the banks are trying to shift the payment of the debt on to customers through the new N6.98 service charge for each USSD transaction, as announced in a joint statement by the NCC and CBN on 16 March.
He, however, noted that it is unfair for the banks to try and pass the debt to customers, adding that the financial institutions are only concerned about protecting their profit margins and are fighting the telecom operators because they rejected the new USSD tariff.
Another source explained that the banks have made huge profits and earnings after tax in the last four years despite the inclement economic conditions. In 2020 alone, the top earners in profit after tax, from data published by leading financial news website, Nairametrics, were Zenith Bank with N230.6 billion, Guaranty Trust Bank, N201.4 billion; United Bank for Africa (UBA); N113.8 billion, Access Bank, N106 billion; Stanbic IBTC, N83.2 billion; and First Bank, N75.6 billion. The banks are also projected to have an aggregate turnover over of N625 billion and earnings of N20 billion at the end of the year.
“The N42 billion they owe telcos is what they don’t want to pay. They prefer to surreptitiously factor it into a new price regime so that customers will unknowingly pay what they had already billed them. Of course, telcos refused, which is why banks are fighting them.
“The banks are willing to cut off services to customers in order to protect profits. The telcos have allowed debts of N42 billion to accrue to ensure that services continue to run. Banks have tried to remove the cost of using USSD, but are willing to cut off subscribers to protect their own fees earned through the channel.
“This only has to do with the preservation of bank profits, which are already substantial and growing despite the wider economic conditions,” the source said.
He stated that the banks have to be called to order by the relevant authorities to do the right thing by paying the accrued debt and not transfer them to the customers.
He suggested that the NCC needs to step up in its responsibilities, not only as a regulator to telecom companies, but act as an efficient intermediary for the operators which, according to him, are being bullied by the banks.
“Note that with their action, the banks are denying customers access to their money, thereby preventing them from making legitimate purchases and transactions.
“The government needs to step in and deal with this once and for all. Nigerian banks need to stop their tyrannical posture. If the NCC is as protective of telcos as the CBN is to the banks, they won’t be in a position to act unilaterally,” the source said.