USSD Fees to Be Deducted from Airtime, Not Bank Accounts, Says NCC.

NCC’s New Directive Stirs Debate: USSD Fees to Be Deducted from Airtime, Not Bank Accounts

In a move that’s generating waves across Nigeria’s digital finance and telecom sectors, the Nigerian Communications Commission (NCC) has issued a new directive asking banks to deduct USSD transaction fees directly from users’ airtime—a sharp shift from the long-standing model of billing through bank accounts.

The new policy, announced at a joint industry forum last week, is intended to resolve a longstanding dispute between banks and telecom operators over unpaid USSD service debts, which currently run into tens of billions of naira. But as with many reforms in Nigeria’s tech-driven economy, the announcement has raised as many questions as it has answers.

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USSD: A Lifeline, Now in Contention

USSD (Unstructured Supplementary Service Data) technology has become a cornerstone of financial inclusion in Nigeria. From checking account balances and transferring money to purchasing airtime and paying bills, USSD codes allow millions—especially those without smartphones or internet access—to engage in digital banking.

But behind the convenience lies a simmering power struggle between banks and telecom providers, who host the infrastructure that USSD transactions run on.

For years, telecom operators have complained that banks failed to remit appropriate fees for the use of USSD platforms. Banks, on the other hand, argue that they cannot bear the cost alone, especially when many customers are already sensitive to transaction charges.

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The New Model: Airtime Pays the Price

With the NCC’s new directive, the landscape is about to shift. Under the new model:

• When users dial a USSD code (e.g., *737#, *894#), the transaction charge will now be deducted from their mobile airtime, not their bank balance.
• Charges are expected to range between ₦6.98 to ₦10 per transaction, depending on the bank and network.
• Banks must now integrate billing with telcos’ prepaid credit systems, ensuring that telcos are compensated immediately and directly.

According to the NCC, this model will “ensure sustainability of USSD services” and remove the bottleneck of inter-institutional debts that has threatened to crash the system in recent years.

“We cannot continue with a situation where service providers are owed billions for services rendered,” said Dr. Aminu Maida, Executive Vice Chairman of the NCC. “This approach protects the ecosystem and ensures USSD remains accessible and reliable.”

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Mixed Reactions from the Public

The directive has sparked mixed reactions among Nigerians, many of whom rely on USSD as their primary or only form of digital banking.

Critics argue that deducting fees from airtime:

• Punishes low-income users who carefully budget their mobile credit
• Creates an extra step and expense, especially for those who borrow airtime or rely on promos
• Could discourage usage and slow down Nigeria’s progress toward cashless banking

“It’s hard enough managing ₦100 airtime for calls. Now they want to eat it up with banking charges?” lamented Adebayo Owolabi, a roadside trader in Ibadan.

Others, however, see the move as a practical fix to a broken billing model.

“Let’s be honest, we were getting this service almost for free,” said Judith Akinrinade, a fintech analyst in Lagos. “This will force people to pay a fair fee and ensure telcos don’t just pull the plug.”

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Banks and Telcos Weigh In

Banks, while initially reluctant, appear to be aligning with the directive, even as they seek clarity on integration timelines.

Telecom providers, on the other hand, have welcomed the move as long overdue. For years, telcos like MTN, Airtel, Glo, and 9mobile have claimed that unpaid USSD debts threatened their operational sustainability.

Some fintechs and mobile money operators are now exploring zero-rated USSD alternatives or subsidized access to cushion low-income users.

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What Happens Next?

The NCC has set a July 1 compliance deadline, after which any non-compliant institution may face sanctions. In the interim, banks and telcos are expected to collaborate on technical integration, customer education, and dispute resolution mechanisms.

The Commission also plans to monitor implementation and conduct a public review within six months.

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Progress or Pushback?

For now, one thing is clear: the age of “invisible” USSD costs is over. With this new model, the NCC has signaled a move toward transparency and accountability, albeit with a heavier burden on the end-user.

Whether this directive ultimately strengthens the digital banking ecosystem or alienates its most vulnerable users will depend not just on implementation—but on empathy, communication, and smart policy adjustments along the way.

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