Customers to Pay Banks’ USSD Fees Through Airtime – NCC

From June 3, 2025, Nigerian bank customers will begin paying for USSD transactions through deductions from their airtime balance instead of their bank accounts. This directive, issued by the Nigerian Communications Commission (NCC), marks a major shift in how digital banking services are billed and is intended to resolve the long-standing dispute between banks and telecom operators over unpaid USSD charges.

Previously, banks deducted USSD transaction fees directly from customers’ bank accounts, a method that led to accumulated debts exceeding ₦250 billion owed to mobile network operators (MNOs). The new approach will place the billing responsibility on the end-user and use the End-User Billing (EUB) model, under which telcos will deduct USSD charges from users’ airtime. The NCC believes this will simplify the payment process and prevent further financial disputes between the banks and telecom providers.

Under the new structure, customers will be charged ₦6.98 for every 20 seconds of USSD usage. The charge will now appear as an airtime deduction instead of a debit from the customer’s bank account. According to the NCC, before any deduction takes place, users will receive a prompt asking for their consent. This is meant to ensure transparency and allow users the option to cancel if they do not wish to proceed.

The Commission clarified that the new model will not affect the existing structure of digital banking services, but it is designed to provide a cleaner and more accountable billing method. By using the EUB system, the NCC aims to strengthen user trust and ensure that both telcos and banks are fairly compensated for their roles in the USSD ecosystem.

The shift has been in the works for some time, especially as tensions rose between Deposit Money Banks (DMBs) and the MNOs. Telecom operators had repeatedly complained that banks were not remitting USSD fees despite continued service access by customers. This resulted in a growing debt that the telcos threatened to recoup by suspending USSD services, which would have impacted millions of Nigerians who rely on the service for basic banking transactions.

Industry stakeholders have welcomed the policy change, describing it as a necessary intervention. However, some consumer groups have expressed concerns over the additional financial burden on users, particularly low-income individuals who rely on USSD for their everyday transactions due to limited access to smartphones and mobile data.

In response, the NCC emphasized that customers who do not wish to pay via airtime can opt out of USSD banking entirely. They are encouraged to use alternative channels such as mobile banking apps or internet banking, which are generally more cost-effective in the long term. The Commission also reiterated its commitment to ensuring that customers are not billed without proper authorization.

Banks are expected to inform their customers of this change through public announcements, SMS notifications, and updates on mobile banking platforms. Similarly, mobile network operators are preparing their systems to comply with the new billing method, ensuring a smooth transition from account-based billing to airtime deductions.

As digital banking continues to grow in Nigeria, the NCC says it remains committed to ensuring consumer protection while fostering a sustainable relationship between telecom operators and financial institutions. The new policy, though controversial, may be a step toward a more accountable and transparent digital economy.