OVERVIEW:
In Nigeria, Unstructured Supplementary Service Data (USSD) has long served as a critical channel for mobile banking especially for users without smartphones or reliable internet access. With simple codes like *894# or *737#, millions of Nigerians have been able to check account balances, transfer funds and pay bills from basic mobile phones. However, in 2025, a major shift in how USSD transaction charges are handled sparked widespread debate among consumers, banks and telecom providers.
Also read:https://moniepoint.com/blog/why-ussd-banking
What Is USSD and Why It Matters
USSD banking is a text-based communication protocol that allows users to interact with their bank accounts via short codes. It’s fast, accessible and doesn’t require data or internet connectivity, making it especially valuable in rural and underserved areas. Before 2025, the cost of USSD transactions was deducted directly from users’ bank accounts. Telecom operators such as MTN, GLO and Airtel facilitated the service and were reimbursed by the banks.
This arrangement worked for years, but over time, banks began delaying payments to telecom providers. In some cases, telecoms were not paid at all, despite customers being charged. This led to mounting tensions and service disruptions, prompting the need for a more sustainable billing model.
The 2025 Shift: Airtime Billing Takes Over
On June 18, 2025, telecom operators began deducting USSD transaction fees directly from users’ airtime balances. This change followed the Determination of USSD Pricing and Services issued by the Nigerian Communications Commission (NCC), in collaboration with the Central Bank of Nigeria (CBN) and other stakeholders. The new model ensures telecoms are paid promptly and directly, bypassing the banks.
However, this shift introduced a new challenge for consumers. Under the current system, users are charged ₦6.98 per USSD attempt, regardless of whether the transaction is successful. This has led to frustration among bank customers, many of whom report being charged for failed transactions due to network errors or system downtime.
Also read: https://www.nairaland.com/8519304/billions-stake-nigerians-pay-failed
Impact on Nigerian Bank Users
With over 219.6 million active bank accounts recorded in Nigeria as of March 2024, the number of USSD users is substantial. For instance, First Bank of Nigeria reported that its *894# USSD platform has surpassed 9.5 million users, underscoring the widespread reliance on USSD for everyday banking.
This means millions of Nigerians particularly those in rural areas are affected by the new billing model. The lack of a refund mechanism or transaction validation before billing has raised concerns about fairness and transparency.
Consumer Concerns and What You Can Do
Regulators are expected to monitor the situation and may introduce new guidelines to protect consumers. In the meantime, users are advised to:
- Check airtime balances before initiating USSD transactions
- Report failed transactions to banks and telecom providers
- Use mobile apps or internet banking when possible
- Stay informed through updates from NCC and CBN
Conclusion
The evolution of USSD billing in Nigeria reflects the growing complexity of digital financial services. While the new model resolves payment disputes between banks and telecoms, it also highlights the urgent need for smarter billing systems and stronger consumer protection. As mobile banking continues to expand, collaboration among regulators, banks, and telecoms will be essential to building a fair and inclusive financial ecosystem.
Also read: https://xxdata.net/what-to-look-out-for-when-buying-a-new-phone-iphone-and-android/
