Nigerian banks proposed to
telecom companies to charge customers directly for USSD services, a memo seen
by NigerianEye has revealed.
This seems to contradict the
public denial by bank CEOs on Monday.
They said the decision “on
whether, and what amount, to charge a customer for accessing USSD is entirely
that of the telco company, in the same way a customer is billed for calls, SMS
and data”.
In a letter to the Association of
Licensed Telecommunications Operators of Nigeria (ALTON) by the Body of Banks’
Chief Executive Officers (BOBCEO) dated
September 16, 2019, the bank MDs had proposed an “orderly implementation”
of end-user billing for bank customers, “aligning with the standard practice
for USSD billing.”
They said: “Customers using
non-bank services already pay for USSD sessions.”
The letter was signed by 13
banks.
On Sunday, MTN sent this message
to its customers: “Please note that from Oct 21, we will charge N4 per 20
seconds for USSD access to banking services. Thank you.”
Isa Ali Ibrahim Pantami, the
minister of communications, immediately directed the Nigerian Communications
Commission (NCC) to suspend the new charge.
In the memo to ALTON, the bank
MDs had kicked against sharing the revenue from USSD transactions with the
telcos.
GTBank, for instance, charges N50
plus VAT for instant transfers to other banks and N20 plus VAT for GTB-to-GTB
transfers.
The telcos, who provide the
platform for the USSD service, had proposed to take a cut of N4.50k per 20
seconds from the charges paid by customers to the banks.
However, the banks kicked against
it, alleging that it would raise the cost by 450 per cent.
THE BANK CEOS’ LETTER IN FULL
Re: Anti-competitive practices on
Reverse Corporate Billing for Bank USSD Services
We write with reference to
instructions to our USSD aggregators, demanding Banks to subscribe to
corporate-level billing for USSD services.
The demand forces us to a level
where we will pay N4.5 per USSD session of 20 seconds, amounting for (to)
around 450% increase in tariff. Many transactions extend to two or three
sessions. This is a cost that will destroy the financial inclusion strides made
by banks where we have included almost 20m more citizens in the financial
system by building services that run on USSD. Our partnership spirit and
recognition of USSD as a critical national asset to drive financial inclusion
has served all stakeholders well, especially those previously excluded
Nigerians.
Beyond the huge cost-per-session,
this would render the laudable financial inclusion initiatives of the Federal
Government of Nigeria unsustainable which would impede development and economic
growth. We will resist the move to reverse billing by multinational telecomms
companies for the good of our National agenda. Reverse billing gives no
visibility to on actually sessions used forces to pay for failed sessions and
leaves us exposed to spurious USSD usage that will increase costs.
We are proposing an orderly
implementation end-user billing for bank customers, aligning with the standard
practice for USSD billing. Customers using non-bank services already pay for
USSD sessions. It forces cost transparency between the Telecoms Company and
customer, and will ensure the customer demands a reliable service that works
when they need it at a price they can afford. In the Reverse Corporate Billing
situation we are unable to attain competitiveness nor transparency.
We trust that on understanding
our concern, and the perilous impact that your stated actions will have on the
National Financial Inclusion Strategy, you will implement end-user billing to
ensure customers have a fair deal and a choice. Our relationship until this
juncture has been a symbiotic one that benefits the millions of users of
cost-effective banking solutions, the banks and the telecom companies for whom
Bank channels have become one of the biggest sellers of airtime using the same
USSD channels and other applications or integrations. If USSD services are used
to ransom banks into exiting our financial inclusion goals, everybody will lose
out – most notably the vulnerable, financially excluded Nigerian.
We look forward to immediate
dialogue and appreciate your response by Monday 23rd September. Yours
faithfully,
Bank CEOs of Nigeria.
ATCON’S RESPONSE
ATCON’S RESPONSE
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