NCC Directs Banks to Deduct USSD Transaction Fees from Users’ Airtime

Introduction

In a major move to resolve longstanding disputes in Nigeria’s financial and telecom sectors, the Nigerian Communications Commission (NCC) has issued a directive that changes how USSD (Unstructured Supplementary Service Data) transaction fees are billed. Starting from June 3, 2025, banks are required to deduct USSD fees directly from users’ mobile airtime instead of their bank accounts. This policy aligns with NCC’s End-User Billing (EUB) model and marks a shift in Nigeria’s mobile banking landscape.

Why This Change Matters

USSD is a popular method for Nigerians to perform banking transactions without the need for internet access. Previously, banks deducted USSD fees from customers’ accounts, leading to friction between financial institutions and telecom operators over unpaid debts. This change ensures transparency, promotes accountability, and enhances user control over mobile transaction costs.

Key Highlights of the New NCC USSD Billing Model

1. Fees Deducted from Airtime, Not Bank Accounts
   From June 3, 2025, customers will pay ₦6.98 per 20 seconds of USSD session directly from their airtime. This removes the burden from bank accounts and shifts the responsibility to the mobile network operators.
2. User Consent is Required Before Billing
   At the start of every USSD session, users will receive a prompt requesting their consent. Airtime is only deducted upon acceptance and if the bank’s service is operational.
3. Greater Transparency and User Awareness
   Customers are now fully aware of the cost of each session and can choose whether to proceed. This eliminates surprise deductions and fosters trust in digital banking channels.
4. Helps Resolve ₦250 Billion Debt Crisis
   The shift aims to resolve a ₦250 billion USSD service debt that has accumulated due to unresolved billing disagreements between banks and telecom companies.

Industry Reactions to the Policy

The policy has received mixed reactions:

• Telecom Operators (ALTON): The Association of Licensed Telecom Operators of Nigeria (ALTON) has voiced concern that not all banks have cleared their outstanding USSD debts, which stood at ₦160 billion as of late 2024. ALTON emphasized that only banks with existing agreements and debt settlements will be allowed to continue offering USSD services.
• Banks: Some banks welcomed the move as it clears confusion over who bears the cost of USSD infrastructure, while others remain cautious, highlighting operational challenges in billing coordination.

What This Means for Mobile Banking Customers in Nigeria

If you rely on USSD for banking, here’s what you need to know:

• Maintain Sufficient Airtime: You will need airtime to initiate transactions. If your balance is low, your transaction may not go through.
• Expect Transparency: You will now be prompted before any charges are made, allowing for informed decision-making.
• Alternative Channels Remain Available: For users who prefer not to use USSD, banks still offer other channels like mobile apps, internet banking, ATMs, and POS terminals.

Advantages of the Airtime-Based USSD Fee Deduction

• Reduces unauthorized account deductions
• Empowers customers with clearer billing decisions
• Helps telecoms recover unpaid service debts
• Encourages smoother collaboration between banks and telcos

Challenges and Concerns Ahead

• Bank Participation: Only banks that have finalized agreements with telecom operators can implement the billing model.
• Rural Impact: Customers in rural areas with low mobile literacy might find the transition confusing.
• Technical Coordination: Full implementation depends on seamless integration between banking systems and mobile networks.

Conclusion

The NCC’s directive for banks to deduct USSD charges from users’ airtime is a progressive step aimed at improving transparency, solving financial disputes, and simplifying mobile banking for millions of Nigerians. As this new model rolls out, both customers and service providers must adapt swiftly to ensure smoother, more secure digital financial transactions.

Stay updated with your bank’s communication and ensure your mobile line always has sufficient airtime before using USSD services. As Nigeria continues to expand its digital economy, such policies are essential to creating a fair and sustainable ecosystem for all stakeholders.