Beginning later this June, a brand new guideline proposed by the Nigerian Communications Fee (NCC) will cost cellular airtime balances as an alternative of shoppers’ financial institution accounts for Unstructured Supplementary Service Information (USSD) classes. This modification marks the most recent improvement in a years-long standoff between telecom operators and banks over who ought to bear the price of USSD transactions—a dispute that has left over ₦160 billion ($106.67 million) in unpaid charges hanging within the steadiness.

The brand new billing mannequin, first hinted at in a June 3, 2025, buyer discover issued by Sterling Financial institution and United Financial institution for Africa (UBA), states that every USSD session will price ₦6.98 per 120 seconds. Telecom operators will deduct this quantity immediately from the subscriber’s airtime, however solely after the consumer consents and the financial institution confirms it is able to ship the requested service. 

The NCC has but to launch a full public assertion on the coverage, however sources accustomed to the continuing discussions affirm that last implementation particulars are being labored out between banks and telcos, and implementation is prone to kick off earlier than the tip of June. Whereas the fee declined to touch upon this story, an NCC official stated the fee was making ready an in depth place on the brand new guidelines. 

An extended-running dispute, lastly addressed

The brand new mannequin is meant to interrupt the cycle of cost disputes which have plagued USSD companies since their inception. Initially, telecom operators supplied USSD infrastructure to banks, who in flip billed clients and had been anticipated to settle service costs with the telcos. Nonetheless, there was no clearly outlined revenue-sharing mannequin, and as consumer adoption soared, so too did the debt owed by banks to telcos.

In 2019, MTN Nigeria tried to shift the price to subscribers immediately by introducing an end-user billing mannequin. The transfer was rapidly halted by the NCC and the Central Financial institution of Nigeria (CBN), which argued that USSD was a “sunk price” and never meant to be charged to finish customers. The NCC later adopted a company billing mannequin in 2020, instructing banks to bear the service prices whereas amassing transaction charges from clients individually.

Regardless of efforts to standardise USSD billing, disputes between banks and telecom operators persevered. In 2021, a flat payment of ₦6.98 per USSD session was launched, with banks anticipated to gather this payment from clients and remit it to telecoms. Nonetheless, compliance remained weak. 

Over time, unpaid charges amassed considerably, and earlier than regulatory intervention, telecom operators claimed that banks owed them round ₦250 billion for USSD companies. In response, the CBN and the NCC directed banks to settle ₦212.5 billion, representing 85% of the whole debt, by the tip of 2024. The debt had steadily grown over a number of years as a consequence of delayed funds and unresolved billing fashions. By early 2025, MTN reported it had recovered ₦32 billion however nonetheless had ₦42 billion excellent.

What adjustments with direct airtime billing?

The NCC’s directive successfully returns to end-user billing, however with safeguards in place. As an alternative of silently passing charges by financial institution channels, customers will now be required to authorise every transaction. As soon as consent is given, the ₦6.98 payment will probably be deducted from their airtime steadiness, giving telecoms full management over payment assortment.

For telecom operators, the shift to direct airtime billing represents a long-overdue decision, providing a number of operational benefits. It eliminates the necessity to pursue banks for settlements, lowering dangerous debt as funds are collected immediately on the level of transaction. Moreover, it provides telcos full oversight of USSD billing and income monitoring, whereas additionally streamlining operations by eradicating the authorized and administrative burden of coping with unpaid money owed from banks.

What does it imply for patrons?

For subscribers, essentially the most instant impression of the brand new USSD billing mannequin is the requirement to have ample airtime earlier than initiating any transaction. This marks a shift from the earlier system, the place costs had been deducted immediately from financial institution accounts, and it might show inconvenient for customers who will not be within the behavior of topping up cellular credit score. For these accustomed to seamless banking with out the necessity to handle airtime balances, this might disrupt routine monetary transactions.

Nonetheless, the mannequin introduces sure advantages that would improve the general consumer expertise. One key enchancment is the introduction of a consent immediate earlier than any cost is utilized. This ensures that customers are totally conscious of and comply with the fees, fostering better transparency and belief in how USSD companies are billed.

The standardised pricing—₦6.98 per 120 seconds per session—offers predictability. With clear and constant prices, customers can higher plan for and handle their cellular banking bills, which can, in flip, encourage extra frequent use, particularly in areas with restricted entry to internet-based banking choices.

USSD stays a significant channel for monetary entry in Nigeria, significantly in rural and underserved areas the place cellular apps and web connectivity are much less prevalent. By simplifying the price construction and enhancing reliability, the brand new mannequin might improve confidence in USSD banking and protect its utility as a monetary inclusion instrument.

Whereas the NCC’s new guidelines resolve one of many telecom sector’s longest-running disputes, some questions stay. Will subscribers push again towards airtime billing? How will banks adapt to a diminished function within the USSD transaction chain? And might this mannequin be sustained in a market already grappling with rising prices and inflation?

Within the quick time period, telcos like MTN and Airtel stand to learn from improved income assortment and a stronger grip on service supply. In the long run, nevertheless, the coverage’s success will depend upon consumer expertise, public schooling, and the power of stakeholders to keep up service affordability.

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