USSD: TelCos bypass Banks, introduce new end-user billing model
In a move aimed at preventing a recurrence of the prolonged N250 billion Unstructured Supplementary Service Data (USSD) debt standoff between telecommunications firms and banks, members of the Association of Licensed Telecom Operators of Nigeria (ALTON) have introduced a new end-user billing model that allows telcos to charge subscribers directly.
Under the revised arrangement, instead of banks billing users and remitting a portion to telecom operators for the USSD infrastructure, telecom firms will now deduct charges straight from subscribers’ airtime balances. The new model also eliminates customer complaints over unexplained bank deductions and gives users control over how much they spend on USSD services.
In a joint statement released by ALTON Chairman, Engr Gbenga Adebayo, and the Publicity Secretary, Damian Udeh, the Association confirmed that the development was implemented in partnership with the Central Bank of Nigeria (CBN) and other key stakeholders to ensure a transparent, sustainable, and user-friendly framework for USSD service delivery.
The telecom body noted that USSD services remain critical to financial inclusion efforts, especially among unbanked and underbanked populations across the country.
The adoption of the new billing structure follows the resolution of the long-standing USSD debt owed by financial institutions, following regulatory intervention by the Nigerian Communications Commission (NCC).
ALTON stated that the transition marks a turning point in Nigeria’s digital financial services landscape, in line with the NCC’s 2025 Determination on USSD Pricing and Services. The statement explained that the previous corporate billing model, which had banks billed by telecom operators, frequently led to delayed payments, service disruptions, and confusion among users.
To mitigate these recurring issues, the NCC introduced the End-User Billing (EUB) model, which empowers mobile network operators to bill customers directly. However, only financial institutions that fulfil certain regulatory and operational criteria are permitted to transition under this new framework.
One of the conditions outlined is that banks must notify customers in advance about the billing system update to ensure full awareness of the new airtime-based charges. Under the new structure, USSD charges will be deducted from the customer’s airtime balance rather than their bank account, with a fee of ₦6.98 charged for every 120 seconds of usage.
According to ALTON, customers will be prompted to opt in and authorise any deductions before being charged. Only successful USSD sessions will incur charges, with no possibility of double billing.
The Association stressed that the availability and functionality of USSD banking services remain unchanged. Customers will still be able to access their bank’s USSD codes, provided they have sufficient airtime to cover the charges.
To ensure a seamless user experience, ALTON advised customers to direct network access issues, such as inability to dial USSD codes, to their mobile network provider. For issues related to transactions, such as failed transfers, users are encouraged to contact their banks. Both telcos and banks are expected to provide responsive customer service to minimise disruptions.
ALTON also reminded the public that alternative digital banking channels, including mobile apps, Internet banking, and ATMs, remain accessible for customer use.
Reaffirming its commitment to consumer protection and service transparency, ALTON said it would continue to work with the NCC, CBN, banks, and other stakeholders to ensure that the transition to the end-user billing model is smooth and beneficial for all parties, especially Nigerian consumers.
“We remain committed to fostering transparency, improving operational efficiency, and safeguarding the interests of consumers across Nigeria’s telecom and digital finance landscape,” the statement added.