Nigerian banks race to meet the USSD debt deadline as the NCC and telcos refuse to extend, risking disruption to mobile banking services

[dropcap]T[/dropcap]he Nigerian Communications Commission (NCC) and telecommunications operators have ruled out any extension for banks to settle their Unstructured Supplementary Service Data (USSD) debts.

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The deadline, set for January 27, 2025, has left defaulting banks scrambling to avoid potential disruption of their USSD services.

As of Friday, seven of the nine initially defaulting banks remained in arrears, with only two having made payments. By Monday, one additional bank had indicated its intent to settle, leaving six lenders still in debt.

The NCC issued its directive on January 15, 2025, warning that failure to clear outstanding debts would result in the disconnection of USSD services.

These services are critical for millions of Nigerians, enabling them to conduct banking transactions without internet access.

Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), confirmed the developments, emphasising the importance of compliance.

“This is just the first phase of the directive. We hope that banks who have complied with this phase will continue to meet their obligations in subsequent ones,” Adebayo explained.

A Phased Payment Plan

The N250 billion USSD debt is being addressed in three phases, as outlined in a December 20 memo from the NCC and the Central Bank of Nigeria (CBN).

1. Phase One: Banks must settle 60% of outstanding pre-API invoices by January 27, 2025.
2. Phase Two: Full payment of pre-API invoices is required by July 2, 2025.
3. Phase Three: Settlement of 85% of post-API invoices by December 31, 2025.

Failure to comply with any phase could result in service disconnection, disrupting mobile banking for millions of Nigerians.

No Extension in Sight

Adebayo ruled out any deadline extension, stating it would require joint approval from the NCC and CBN, which appears unlikely.

“No, there will be no extension. Both regulators must act in concert, and I doubt any decision would be made without consultation,” he said.

The NCC’s Director of Public Affairs, Reuben Mouka, reiterated that telecom operators have the authority to disconnect services if banks fail to comply.

“The deadline is clear. It’s now up to the operators to enforce disconnections as outlined in our directive,” Mouka stated.

Implications for Nigerians

USSD services are vital for mobile banking in Nigeria, particularly for individuals in remote areas with limited internet access. A disruption could significantly impact financial transactions and the economy.

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To prevent this, Adebayo urged defaulting banks to meet their obligations. “It’s crucial for non-compliant banks to settle their debts to ensure we don’t disrupt the economy and the digital services subscribers depend on,” he said.