" ITREALMS: USSD access fees: ALTON indicts banks over double charging of end-users - ITREALMS

Wednesday, October 23, 2019

USSD access fees: ALTON indicts banks over double charging of end-users - ITREALMS

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has indicted Bankers Committee over the double charging of end-users through the Unstructured Supplementary Service Data (USSD) access fees, reports 

Recall that to these banking services attracted outcry which led to the subsequent suspension of the implementation of the charges by the Honourable Minister of Communications, Dr. Isa Pantami.

"Our members are deeply concerned about the feelings of customers who have been instrumental in the growth of the telecommunications sector. Given our members’ commitment to the ethos of accountability and transparency in engagement with consumers, we wish to provide clarity on the issues surrounding the USSD access and the associated charges.

"The USSD channel has evolved over time from a telco exclusive channel used for only telco services such as balance inquiry and recharges, to a channel being utilized for the deployment of financial, insurance, agricultural and government services, etc. The USSD channel is delivered using the Standalone Dedicated Control Channel (SDCCH) which is also used for call set-up, SMS set-up, and delivery.

"Similar to the other telco services such as SMS, voice and data, network resources are utilized in the provisions of USSD services and as such there are significant costs associated with deploying and maintaining the service.

"The Banks however identifying the convenience of delivering services to its customers over the USSD channel applied to the Nigerian Communications Commission for USSD codes to deliver these services. USSD Shortcodes were thereafter issued to the Banks and as is expected, they became fully responsible for the charges associated with delivering services to their customer through these shortcodes.

"Recently, the USSD channel has become a preferred service channel for the financial sector because of the cost efficiencies derived from the adoption of the channel. Today, USSD codes such as *737#, *906# have become leading brands because Banks have intensified the promotion of this channel to mostly the banked base towards the overall improvement of efficiencies with less focus on other service channels such as brick and mortar centers.

"With the increase in USSD traffic driven by financial services which currently constitutes approximately 90% of the entire USSD traffic, our members have continued to incur additional costs to provision additional SDCCH channels to mitigate against the negative impact on the quality of service. It is therefore factually incorrect when allusions are made that USSD costs incurred by our members are sunk costs which are not recoverable

"In order to accelerate the adoption of financial services on USSD, the banks partnered with our members to zero-rate the USSD access to end-users, while the banks bore the cost for the provision of service. Based on this arrangement, the banks took on the responsibility of billing customers and paid our members for use of the USSD infrastructure from the service fees deducted from the customer’s bank account. These service fees charged by the banks, were however far in excess of the costs remitted to our members by the Banks for providing the USSD platform and have since remained so.

"Following the issuance of the USSD Pricing Determination by the Nigerian Communications Commission which resulted in a price review of USSD service by our members, the banks stated that they would no longer pay for USSD service delivered to their customers and requested our members to charge customers directly for use of the USSD channel. This billing methodology where the Banks customer is directly charged USSD access fees by our members irrespective of the service charges that the bank may subsequently apply to the customers’ bank account is called “End-User Billing” which the banks specifically demanded that all our members implement. The banks, however, provided no assurances to our members that such service fees charged to customers’ bank accounts for access to bank services through the USSD channel will be discontinued post implementation of end-user billing by our members. The removal of these service fees by the banks would have meant that if bank customers were charged only the USSD costs communicated by our members per USSD session, bank customers will be paying far less than what they are currently being charged by the banks which in some instances are as high as N50. Additionally the banks and telco’s will be applauded for collaborating towards the financial inclusion objectives of the Federal Government.

"Our members were however concerned that the banks were unlikely to discontinue the USSD service fees charged by the banks when customers utilize the USSD channel thereby resulting in double and over billing, whereby our members charge consumers for the USSD access from their airtime and the Banks still proceed to charge the same consumers a service charge from their bank accounts. In the interest of the consumers, our members challenged the implementation of end-user billing until a formal request for its implementation was received from the Body of Bankers Chief Executive Officers and several banks specifically demanding that end-user billing be implemented.

"In view of the opposition to the implementation of end-user billing by customers, our members, as responsible and responsive corporate citizens are committed to safeguarding consumer interests, and in this regard, we are willing to explore mutually beneficial solutions which ensure that costs associated with the provision of USSD services as determined by the Nigerian Communications Commission are fully recovered by our members and customers are not billed twice for the same service and by different institutions which is what end-user billing advocated by the banks will entail.

"In this vein, we call on the Nigerian Communications Commission and the Central Bank of Nigeria to, as a matter of priority, convene a meeting of the financial and telecoms industry stakeholders to address this issue for the benefit of the consumers and other stakeholders," ALTON submitted.

Chuks Egbuna/Editor

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