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Understanding the Shift in USSD Billing in Nigeria
Starting in June 2025, Nigerian mobile users will see changes in how charges are applied for Unstructured Supplementary Service Data (USSD) sessions. With a new guideline from the Nigerian Communications Commission (NCC), telecom operators will directly deduct USSD fees from users' airtime, rather than relying on banks to process these charges. This change is essential in resolving a longstanding conflict over unpaid fees, allowing for a seamless user experience and improved financial accountability.
The Long-standing Payment Dispute
The ongoing dispute between telecom providers and banks dates back several years. Originally, telecom operators bore the costs of USSD services, expecting banks to reimburse them as part of a revenue-sharing model. However, the lack of clarity in agreements led to an accumulation of debts owed by banks to the telecoms, amounting to over ₦160 billion. This unresolved conflict has stifled innovation, as telecoms struggled to recover payments, dissuading them from investing further in advanced technologies.
What Does This Mean for Users?
This new approach offers users more transparency. Each time a service using USSD is accessed, users will now have to authorize payments, allowing them to remain aware of costs. At the rate of ₦6.98 per session, this enables users to have better control over their expenses. Importantly, this model empowers telecoms with direct access to their revenue streams, fostering improved service development, including the deployment of fintech solutions that can harness AI technologies for better user experiences.
The Future of Fintech and Telecom in Nigeria
The shift to airtime billing aligns with the broader digital transformation journey that many African nations are experiencing. As the demand for automation and digital payments grows, this model could pave the way for enhanced service deliveries across fintech and AI solutions. For instance, mobile wallets and banking services are likely to benefit from this streamlined approach, encouraging startup innovations that can flourish in a more secure financial environment.
As Nigeria's tech ecosystem rapidly evolves, understanding these changes is crucial for entrepreneurs and investors eyeing the potentials of African startups. With greater transparency and efficiency in USSD billing, a new era of financial technology innovations is expected to emerge, pushing the boundaries of what is achievable in the African tech landscape.
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