Bank CEOs Commend NCC’s Decision to Suspend USSD Charges by Telcos
By UMORU ABDULKADIR
The Body of Bank Chief Executive Officers has applauded the recent notice from the National Communications Commission (NCC) announcing the immediate suspension of end-user billing for Unstructured Supplementary Service Data (USSD) services.
This commendation was given by the body on Thursday’s evening In a statement jointly signed by the CEOs in which they noted that it had had meeting with the telecommunications companies, where they were presented with the two options of corporate billing or end-user billing, and consequently, banks supported the standard practice for a relationship between a telecommunications company and their subscribers.
The statement reads in part, “When presented with two options by the telecommunications companies – corporate billing versus end-user billing – banks supported the standard practice for a relationship between a telecommunications company and their subscribers. We proposed the same method they charge for voice calls, SMS and data. We then asked to work with the telecommunications companies to bring the cost of their USSD service down for Nigerians. We were therefore very surprised at the announcements from MTN on the 19th and 20th October.”
The statement added that the banks supported the standard practice for a relationship between a telecommunications company and their subscribers, they could not reasonably be expected to charge for the service of another industry, over which they had no control of price, quality and security.
It noted that the banks are delighted over the suspension of USSD charges by the NCC since it would now allow consumers to access their bank for free, using USSD, adding that the move was a giant leap for the National Financial Inclusion Strategy which has captured 20m Nigerians into the formal financial system in recent years.
“The Banks, supported by the Central Bank of Nigeria, have long advocated the designation of USSD services as a critical national asset to enable such free access to USSD. Indeed, in countries like India, free access to USSD channels have long been established to successfully drive financial inclusion.”
The body, while expressing optimism in the banks in collaboration with CBN’s drive to attain 80% financial inclusion by 2020, it said, “we look forward to working with the telecommunications industry to achieve the objectives of the National Financial Inclusion Strategy.”
In another development, MTN Nigeria Communications Plc had earlier today issued a statement, clarifying its position on the subject, where it confirmed that the new charging model has not gone into effect.
In the statement, which was published on the website of the Nigerian Stock Exchange (NSE), MTN said, “Following consultation with industry stakeholders, customer feedback and media reports related to the message notifying our customers of upcoming changes in our charging model for access to banking services via the USSD channel, we wish to confirm that the new charging model has not gone into effect.”
MTN maintained that its SMS notification to customers was reflective of its transparency in its dealings with its customers, the industry and relevant regulatory bodies and was sent after formal requests received from individual banks as well as the Body of Bank CEOs to implement end-user billing – a billing methodology where the customer is directly charged USSD access fees irrespective of the service charges that the bank may subsequently apply to their bank account
It further explained that the existing structure before this latest development was a corporate billing plan where a corporate client, the provider of the service that is accessed through the USSD channel (in this case the bank), pays the access fees at a wholesale price, adding that MTN believed the costs associated with USSD banking services should be charged to the consumer only once – as with other USSD based services we provide, which we believe has been adequately provisioned for within existing Central Bank of Nigeria (CBN) guidelines.
The statement reads in part, “It is in fact in line with the National Financial Inclusion Strategy of the Federal Government that we resisted the calls for end-user billing. We relented only after exhausting avenues of engagement with the banks in pursuit of a model that enabled a single charge. We believe separate charges by the banks and telecoms companies are an unnecessary burden on the consumer especially the target group that the National Financial Inclusion Strategy is aimed at.”
”With this in mind, it is imperative for all parties to approach the fable and engage constructively towards a solution, putting the consumer at the Fore of all decisions. The banks have been and still are our esteemed customers and valued partners. We look forward to collaborating with them and other stakeholders and will be glad to implement the decisions approved by our Regulators.”
Recalled that MTN had on October 19 -20, 2019 sent messages to its customers that it would from October 21, 2019, charge N4 on every 20 seconds spent while using USSD access to banking services.
“Yello, Please note that from Oct 21, we will charge N4 per 20 seconds for USSD access to banking services. Thank you,” the message had read.
But in a swift reactions, Banks CEO in a joint statement, noted that: “Our attention has been drawn to SMS sent on Saturday 19th October by MTN Nigeria Communications PLC (“MTN”) to customers of banks in Nigeria in respect of the above.
“The message states that the banks requested MTN to start charging customers for USSD transactions directly. It also asks customers to contact their banks for more information.
Debunking the allegations, the bank CEOs insisted that they did not ask MTN to start charging customers as contained in the text message, stating that the decision on whether, and what amount, to charge a customer for accessing USSD is entirely that of the telco company, in the same way a customer is billed for calls, SMS and data.
They explained that MTN had delayed the implementation of the end user billing despite several engagement by the banks and the Central Bank of Nigeria (CBN)
“MTN is the only Telco that is yet to implement end-user billing which is the standard practice for customer-initiated transactions. This is despite the fact that the banks, working with the Central Bank of Nigeria (CBN), have engaged MTN over a period of more than one year to try and bring down the cost of USSD to aid financial inclusion.
“That the banks are determined to pursue the National Financial Inclusion Strategy of the Federal Government of Nigeria and will continue to advocate that Telcos identify wholeheartedly with this laudable initiative and implement transparent and low pricing model in the use of USSD access codes.
“We wish to re-iterate that financial transaction charges are regulated by the CBN as stipulated in the Bankers Tariff, and that the charges for financial transactions carried out with banks remain unchanged.”
CBN Governor, Godwin Emefiele who said the MTN’s plan would not hold noted that USSD is a sunk cost that is not additional on the telecom firm’s infrastructure.
He stated that a meeting was held some months back with telecom companies and leading banks where they all concluded that USSD is a sunk cost.
“About five, four months ago, I held a meeting with some telecom companies as well as the leading banks in Nigeria at Central Bank, Lagos.
“At that time, we came to a conclusion that the use of USSD is a sunk cost.
Emefiele said the telecom firms disagreed and insisted on imposing the charge which the CBN governor and the banks would not allow to happen.
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