New USSD Charges Threaten Mobile Payments

THE charges for bank customers using the Unstructured Supplementary Service Data (USSD) for payments have discouraged many Nigerians from using the service, investigation by Prime Business Africa has shown.

Some USSD users who spoke with our reporter on the issue, lamented that the N6.98 flat rate per transaction introduced by the Central Bank of Nigeria, has increased the burden of multiple bank charges.

A teacher, Maryann Nwanochi, said the newly imposed fee had discouraged her from using USSD for transfers.

“The frustration of accepting their terms twice before processing your transaction is horrible and the fact that they will deduct N6.98 whether the transaction went through or not is very bad, that is an act of stealing from the society,” she said.

Also venting her frustration, a journalist, Cynthia Alo, said, “It is annoying. After the N6.98 charges, your bank will still charge you for the said transaction. I just have to use it because of the necessity of my transactions.”

Another customer, Kehinde John, stated that the charges had diminished the value of his account balance.

The CBN had introduced new charges for USSD services in March as part of agreement reached when banks and telecommunication operators met to discuss the N42bn debt owed mobile operators by banks.

The new charges which became effective immediately after the announcement, has been seen by many as a setback to financial inclusion.

According to a business woman, Mrs. Christiana Ejiogu, the money charged for USSD services is frustrating and should be reviewed.

A journalist, Ridwan Adeola, decried the USSD policy and other bank deductions and called for a better system.

He said, “It has not discouraged me from using USSD because for me, using USSD for bank transactions is essential. I don’t use bank apps. And I must recharge at crunch time for data, or make transfer.

“These are things I cannot do without. Even though these people are stealing from us, in my opinion, they have this liberty simply because we don’t have a working system. A working system would have checkmated their excesses.”

A banker, who gave her name as Chisom, said the system should be reviewed, adding that “Even when network was bad and you couldn’t complete the transaction, they will still deduct the fee.”

A student, Rossy Aniekwe, who described the situation as annoying said the system should be scrapped entirely.

The new charges according to USSD users constitute a stumbling block to the use of the channel.

Part of the reasons mobile payment was introduced in Nigeria was to drive cashless policy which the CBN established to curb excesses in the handling of cash, drive financial inclusion and serve as a means of extending financial services to the unbanked and underbanked community.

According to a 2021 data by Merchant Machine, Nigeria is the world’s 6th most unbanked country with a population of 206.1million of which 60% are unbanked. The data put cash transactions in Nigeria at 24%, but the internet penetration is said to be 70%.

The data implies that more needs to be done to accommodate more people in the banking system, including mobile payments.

Another data by Statista showed that mobile money users made $767 billion worth of transactions in 2020, with African nations accounting for the largest share of transaction value. Mobile money users in sub-Saharan Africa made transactions amounting to $490 billion  in 2020.

Africa, according to experts is a major player in mobile money among all continents in the world, and Nigeria has been making impact in this area.

According to GSMA, poorly designed taxation regimes will continue to adversely impact mobile money growth and  have huge impact on marginalised groups.