After a prolonged dispute between Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) over unpaid debts for the use of Unstructured Supplementary Service Data (USSD), there is now a glimmer of hope for resolution, thanks to the new leadership at the Central Bank of Nigeria (CBN).
In remote settlements like Ijagba, Ogun State, where conventional banks are absent, alternative banking methods like USSD play a crucial role for financial transactions. For individuals like Olusola Michael, a teacher, and millions of others, USSD serves as a lifeline for payments, transfers, and subscriptions, especially in regions with limited access to traditional banking services.
The dispute between MNOs and DMBs had sparked concern as it could potentially disconnect many people from their primary financial lifeline. The Association of Licensed Telecom Operators of Nigeria (ALTON), representing MNOs, had even obtained approval from the Nigerian Communications Commission (NCC) for disconnection.
However, the dispute’s resolution gains significance considering Nigeria’s ongoing efforts to improve financial inclusion. Despite progress, the country still falls short of its 2012 financial inclusion strategy targets. The adult population with bank accounts has increased, driven largely by integrating users of non-bank and informal financial services. Yet, access to credit and non-bank financial services like insurance and pensions remains limited, compared to some East African countries where non-bank accounts like mobile money are more prevalent.
USSD technology, dating back to the 1980s, has played a vital role in enhancing financial inclusion. Users without smartphones can access digital banking services by dialing a code. This technology has enabled feature phone users to conduct functions such as transfers, balance inquiries, and generating bank statements.
Nigerian banks like Fidelity Bank and GTBank introduced mobile banking services through USSD codes following the success of M-Pesa in Kenya. USSD has empowered low-income households, contributing to the implementation of CBN’s National Financial Inclusion Strategy.
In light of the importance of USSD in promoting financial inclusion, the commitment shown by the new CBN leadership to resolving the dispute can be seen as a positive step towards ensuring uninterrupted access to essential financial services for millions of Nigerians.