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April 12, 2021

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Customers stranded as banks block MTN from banking channels

3 min read


A feud between Nigerian banks and MTN left millions of subscribers unable to recharge their phones using the USSD services on Friday, after banks shut off the telecoms firm over fees charged for the service.

MTN advised its subscribers to seek alternative means of recharging their phones without informing them what the problem was.

“Dear Customer, our bank recharge channels are currently unavailable. Kindly recharge using physical cards. We apologise for the inconvenience. Thank you,” one message read.

Another read: “Please be informed that some of MyCustomers may not be able to purchase airtime and data recharges via banks including MOD and myMTN App. Please pacify MyCustomers and educate them to use MTNTopit, MoMo channels, as well as the debit card options on MOD or myMTN App.”

Phone users expressed their frustrations online as the outage lasted throughout Friday.

A top MTN official who asked not to be named told PREMIUM TIMES that banks cut off the service to protect their profits. He described the move as “tyrannical”.

“Banks have tried to remove the cost of using USSD, but are willing to cut off subscribers to protect their own fees earned through the channel,” the source said. “This only has to do with preservation of bank profits, which are already substantial and growing despite the wider economic conditions.”

“The government needs to step in and deal with this once and for all. Nigerian banks need to stop their tyrannical posture. USSD has not been cut by MTN,” the official said.

“Note that with their action, the banks are denying customers from accessing their money to make legitimate purchases/transactions. Banks are focused on bullying everyone to maximize their revenues. The banks did not send a formal communication to customers or to MTN before taking this action.”

PREMIUM TIMES understands that the row is over the percentage banks should earn from every recharge.

A source said MTN was seeking to reduce the percentage of what goes to the banks by almost half, a decision the banks kicked against.

The banks argue that since they maintain the infrastructure through which the recharges are done, they deserve better. In protest, the banks decided to remove MTN services from their infrastructure.

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USSD feud

The Central Bank of Nigeria and the Nigerian Communications Commission on March 15 settled a prolonged row between banks and telcos over fees by imposing a new charge for the banks’ short-code service, known as USSD, which allows millions of Nigerians to use their mobile phones to access financial services daily.

The Association of Licensed Telecommunication Operators of Nigeria (ALTON) said its members were owed N42 billion by banks and threatened to suspend the service.

From March 16, subscribers have paid a flat rate of N6.98 each time they use the USSD for banking transactions, a move that has angered customers and alarmed advocates of financial inclusion.

The regulators claimed the billing would “ensure a much cheaper average cost for customers to enhance financial inclusion”.

A PREMIUM TIMES examination showed that the banks and telecommunication companies would realise at least N564 million in the next 12 months as proceeds from the new mobile banking fee.

When PREMIUM TIMES reached out to MTN spokesperson, Funso Aina, he did not reply to calls or messages sent to him through text and WhatsApp.

The spokespersons of Access Bank and United Bank of Africa, Amechi Okobi and Ramon Nasir, did not respond to calls or text messages sent to them to confirm if the notice by MTN is true.

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