The new charge has angered customers and alarmed advocates of financial inclusion, but it is good news for Nigeria’s mega-profiting banks and telecom companies.

By Ini Ekott

Nigerian banks and telecommunication companies will realise at least N564 million in the next 12 months as proceeds from the new mobile banking fee approved by the Central Bank of Nigeria, according to PREMIUM TIMES estimates.

The CBN and the Nigerian Communications Commission this week settled a prolonged row between banks and telcos by imposing a new fee for the banks’ short-code service, known as USSD, which allows millions of Nigerians to use their mobile phones to access financial services daily.

The Association of Licensed Telecommunication Operators of Nigeria (ALTON) said its members were owed N42 billion by banks and threatened to suspend the service.

Starting Tuesday, March 16, subscribers now pay a flat rate of N6.98 each time they use the USSD for banking transactions, the CBN said, a move that has angered customers and alarmed advocates of financial inclusion.

The regulators claimed the billing will “ensure a much cheaper average cost for customers to enhance financial inclusion”.

“To promote transparency in its administration, the new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts,” the CBN said.

A PREMIUM TIMES examination shows the parties involved will realise at least N564 million annually from the deal that has pushed the burden of payment to customers.

The estimates are based on the volume of mobile banking transactions in the country as reported by the central bank.

Its latest data for 2018 show that mobile payments in Nigeria stood at 59.9 million that year. The country recorded 43.9 million transactions in 2015, 47.1 million in 2016 and 47.8 million in 2017.


As of 2018, mobile banking took only a little slice of the country’s total e-payments. The ATM was the most patronised with 68.3 per cent, followed by PoS terminals and mobile payments with 23.1 and 4.6 per cent respectively.

Mobile payments have since exploded in the country with more people owning phones and the government introducing a financial inclusion initiative.

If a conservative growth rate of 35 per cent is taken between 2018 and 2021 (mobile transactions grew at 36.4 per cent between 2015 and 2018), it would mean the total number of mobile transactions in the country by 2021 would be at least 80.8 million.

That totals N564 million at N6.98 per transaction.

READ ALSO: Nigeria telcos to block millions from mobile banking over banks debt
The amount is likely to be higher as the CBN acknowledged its data for mobile transactions were based on only mobile money operators that uploaded data to its database within a certain timeframe.


Financial Inclusion

The new charge is good news for Nigeria’s mega-profiting financial institutions and telecom companies, who many Nigerians view as deft at taking advantage of lax regulation to bill customers. But it has riled those pressing for more financial inclusion.

“An attack on USSD is an attack against the poor people. CBN didn’t think that one through at all,” a Twitter user, Oloye, wrote Tuesday. “Those who do not have access to smartphones are the ones most affected by USSD costs, i.e the poor.”

By December 2018, the percentage of banked adult Nigerians stood at 39.7, according to the CBN. The results were most dismal in the North-west, where 56, 70 and 62 per cent of adults were not financially included in 2014, 2016 and 2018 respectively. In the South West, the figures were 25, 18, and 19 per cent for those years.

The charge adds to a host of other fees paid by customers for financial service, critics note. For a single transaction, a customer would now pay for the USSD, SMS alert, interbank transfer and stamp duty. They also cover monthly ATM maintenance and transfer fees.

https://www.premiumtimesng.com/news/headlines/449712-exclusive-banks-telcos-will-rake-in-over-half-a-billion-naira-on-new-ussd-charge.html

At the expense of we the customers/subscribers

The blessings of our Lord Jesus Christ are upon Nigeria.

Robbing Peter to pay Paul

This people are always on the look out purposely to extort the masses instead of channelling the same IQ in making the country a better place....just like someone rightly said, Even Pharaoh wasn't this wicked....!!

Banks, Telcos Ole barawo

E be like say na to go buy Kolo remain o.

Ok

The rich keeps looking for means to make the poor poorer...

E be like i go leave this country for una o.

When the dead rule over the living, things will always fall apart.

Las las na we de masses dey suffering am

James 2
6But you have dishonored the poor. Is it not the rich who are exploiting you? Are they not the ones who are dragging you into court? 7Are they not the ones who are blaspheming the noble name of him to whom you belong?

the masses are always at the receiving end of their thievery....

Good for Nigerians..
Next election they'll still fall for fulani's division tactics and vote incompetent leaders probably worse than buhari.

In 2019 they said peter obi is igbo and so therefore it's better buhari keeps leading.. Enjoy 4+4

I don't care at all.

Yeye, instead of sourcing for means to make Nigerians to remit dollar into the economy to offset the scarcity of dollar, they are busy trying to make banks rich.
Nigerians will just run off to use crypto and then via P2P or by remitting to Nigerians in other countries, they will still get their money converted.
There is high inflation and high unemployment plenty stufs to keep the CBN busy and cracking their brain and not trying to enrich banks

Every Nigerian should actually get the Kuda bank app right away

they should ku ku kill us na....so much for cashless policy.... SMH

PMB is milking us dry. He might even liaise with dangote to add extra charges to a liter of PMS when his refinery comes upstream.

No way

ChuckKingston:
Every Nigerian should actually get the Kuda bank app right away

which one is kuda bank app?

E Don red

Could this be real despite struggling to survive under this pandemic brouhaha?

The charge adds to a host of other fees paid by customers for financial service, critics note. For a single transaction, a customer would now pay for the USSD, SMS alert, interbank transfer and stamp duty. They also cover monthly ATM maintenance and transfer fees.

6.98 naira + 20 naira + 50 naira + 50 naira
= 126.98 per transaction conducted by Nigerians.

Oyiboman69:
which one is kuda bank app?

Kindly Google it sir

Eventually, this greed is what will chase these banks out of business. They should wait till likes of flutterwave and paystack enable savings business models just like piggyvest.

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Maxymilliano:
Robbing Peter to pay Paul

It's not new, that is what makes us human, you must rob Peter to pay Paul it's normal