After several years of drawn-out disagreements and stalled negotiations, Nigeria’s commercial banks have now settled 95% of the N180 billion debt owed to telecommunications operators for the use of Unstructured Supplementary Service Data (USSD) services.
This development has cleared the way for the implementation of a new end-user billing system—marking a major turning point in one of the longest-running disputes in Nigeria’s digital finance ecosystem.
The Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo disclosed this on Thursday during a virtual media session on the migration to end-user billing for USSD services. According to Adebayo, only three banks have yet to fully settle their outstanding balances, but they have entered into repayment plans and are expected to complete payments shortly.
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A Longstanding Debt Loggerhead
The USSD debt saga began around 2019 when telcos demanded payment for their infrastructure and network usage, which banks used to provide mobile banking services to customers through USSD shortcodes. USSD had become a critical tool for mobile banking, particularly for millions of Nigerians without access to internet-enabled devices or data. However, while the banks charged their customers for USSD transactions, telcos claimed they received little to no compensation for the infrastructure and bandwidth consumed.
The disagreement stemmed from the mode of billing and who should bear the cost. Banks preferred corporate billing, where the cost of USSD sessions was billed centrally and deducted from a shared account. However, telecom operators argued that this model had led to non-payment and mounting debts, even as usage volumes soared.
Tensions came to a head in 2021 when the debt figure surged above N40 billion and ALTON threatened to suspend USSD access for several banks. The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) were forced to intervene multiple times to prevent a disruption of mobile financial services.
Despite various interventions and partial repayments, the debt continued to balloon, reaching around N80 billion in 2022, and later climbing to N180 billion by January 2025, according to ALTON. Each round of talks between the CBN, NCC, telcos, and the banks resulted in temporary reliefs or promises, but no lasting resolution.
From Corporate Billing to End-User Billing
In response to the deadlock and to ensure the sustainability of USSD services, the NCC in June 2024 issued a new pricing and service framework that introduced end-user billing. Under this model, customers are directly billed from their airtime balance, rather than their bank account, for each USSD session. The new system aims to remove inter-party disputes and streamline revenue collection for telecom operators.
Gbenga Adebayo confirmed on Thursday that the clearing of 95% of the debt by banks was one of the major preconditions for migrating to end-user billing. He noted that one major bank has already been fully migrated, with positive trial results. Other banks are currently undergoing the same transition process.
“The migration is not compulsory. Banks that choose to remain on the corporate billing model can do so—as long as they are fully settled with no outstanding debts to the telecom operators,” Adebayo explained.
Safeguards Against Overbilling
Addressing customer concerns about double deductions or billing errors, Adebayo clarified that telecom operators will not charge customers for failed USSD sessions originating from the telcos’ network. However, if a transaction fails on the bank’s end after being successfully processed by the telco infrastructure, the customer will still be billed. In such cases, he advised that complaints should be directed to the banks, not the telecoms.
“If customers see a deduction from both their bank account and airtime for a single transaction, they should query their bank. That’s double billing, and it’s not supposed to happen under this new regime,” he said.
What This Means for Customers
The N6.98 per USSD session remains unchanged under the new system. According to MTN Nigeria’s Chief Enterprise Business Officer, Lynda Saint-Nwafor, the only difference is the mode of payment—from airtime instead of direct bank deductions. She said the telecom industry is working closely with the NCC to improve transparency and accountability, including monthly reporting and error message standardization.
“We are committed to ensuring this is seamless for subscribers, and all operators have been directed to provide monthly performance reports,” Saint-Nwafor said.
The migration to end-user billing is part of a coordinated move by the NCC and the Central Bank of Nigeria to improve transparency, reduce systemic friction, and ensure the long-term sustainability of mobile-based financial services, particularly in rural and underserved communities.
For years, the inability of banks and telecoms to agree on USSD payment terms threatened the very foundation of Nigeria’s digital banking success, despite USSD being a lifeline for millions of Nigerians outside the formal banking space.
Now, with most of the debt settled and a clear path forward, the new billing model could finally stabilize one of the most critical links in Nigeria’s mobile financial chain—and help prevent future disputes.