USSD Banking: Millions Stranded As Banks Disconnect MTN Customers

Posted by African Examiner Banking & Finance, Featured, Latest Headlines, News Across Nigeria Saturday, April 3rd, 2021

(AFRICAN EXAMINER) – Millions of telecommunications subscribers were stranded on Friday as commercial banks disconnected MTN customers from banking channels including the Unstructured Supplementary Service Data and banking apps.

MTN has 77.35 million subscribers, according to latest industry statistics from the Nigerian Communications Commission.

MTN customers complained on Friday about being unable to recharge their MTN lines using USSD and other banking channels like the bank apps.

Customers were also unable to do banking transactions on MTN lines through USSD.

A source said this was not the doing of the telco but the banks who had refused to give any formal communication prior to the disconnection.

The source said, “Please note that MTN didn’t cut off customers and has no hand in this. This is strictly the banks acting on their own.

“We woke up this morning to see that MTN customers were cut off from USSD services overnight. This has come as a surprise as there was no formal communication from the banks to their customers prior to their taking this action.’’

The source disclosed that MTN had reduced the banks’ commission from an average of 3.5 per cent to 2.5 per cent which predicated the actions of the banks.

According to the source, the reduction is standard because the volumes compensate for the reduction, adding that the contract with convenience channel partners and aggregators through which they were indirectly connected to the banks allowed this.

The source said, “The banks wrote back to the aggregators to revert back to the old commission, otherwise, they would block MTN airtime in all their channels.

“The channels were blocked midnight leaving our customers stranded. Interesting that the banks’ managing directors met and quickly took a decision.

“Subscribers to telecommunications are being denied services by the banks even when they have money in their accounts.

“The government needs to step in and deal with this once and for all. Nigerian banks need to stop their tyrannical posture.”

While some telco sources claimed that the disconnection of MTN subscribers to fight the telco for insisting that the banks must pay the N42bn allegedly owed operators for past USSD services, banking sources said there was no such debt.

However a source named withheld stated that, “Acting on directives from its South African parent company, MTN Nigeria has made an ill-conceived play at monopolising the Nigerian telecommunications industry.

“This ploy was made clear on March 30, 2021 when the service provider facilitated a meeting with aggregators and announced a 37.5 per cent reduction in its vending commission without prior discussions, notice or approval from the Nigerian Communications Commission or the Central Bank of Nigeria.

“Acting unilaterally, without consultation or negotiation with any financial institution, MTN informed all aggregators that it will be reducing the agreed commission that it will be remitting for airtime sales on banking platforms from four per cent to 2.5 per cent.

“If no other service provider is supporting this stance, why is MTN hard-balling and making life hard for its customers? Didn’t CBN just resolve a dispute with the telcos, now this?

However, the Chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, said the banks had demonstrated bad faith by disconnecting some of their services rendered to MTN.

“The attitude of the banks will charge the atmosphere, strain the relationships between us and we expect that the banks should tread very softly,” he told one of our correspondents.

Adebayo noted that the recent understanding between telcos and banks on the USSD had nothing to do with the problem on the ground now.

He said, “It appears that the issue now is some form of commercial disagreement on the commission payable for some form of vending on behalf of the operator.

“It is like when you buy airtime from someone and you have to pay a commission on it and all that. So this is the situation that has happened with the banks and that member of ours.”

The ALTON chairman, however, argued that even if it was a commercial agreement that had the problem, because of the impact of the failure of such agreement on the public, telcos expected that the banks should have known better.

The President, Association of Telecommunications Companies of Nigeria, Ikechukwu Nnamani, also said that there was a disagreement, but expressed hope that it would be resolved.

Officials of the Federal Ministry of Communications and Digital Economy said they were aware of the development and had informed the minister about it.

“The minister has been made to know about what you are asking me and I believe interventions are ongoing right now,” a senior ministry official who spoke in confidence said.

The Minister of Communications and Digital Economy, Dr Isa Pantami, said in a Twitter post on Friday that he had engaged with both the Central Bank and NCC on the matter of the banks’ disconnection of MTN subscribers.

He gave the assurance that the authorities would resolve the issues between the telco and the banks and would restore services to MTN customers.

Pantami tweeted, “On the fallout between MTN and some banks on USSD services today, I engaged with both regulators, the Governor of Central Bank and Executive Vice Chairman of the Nigerian Communications Commission.

“We have reached an advanced stage of resolving the issues, for the services to be restored to our citizens.”

The spokesman and acting Director, Corporate Communications Department, CBN, Osita Nwanisobi, said the bank was looking into the issue. (Culled From Punch)