The dispute over USSD charges has brought to the fore how banks and telecommunications companies (telcos) have been dipping into customers’ wallets through needless and exorbitant surcharges.
According to a features piece done by a telecoms analyst, Mr. Sonny Aragba-Akpore, and published by Nigeria Everyday (Everyday.ng), the argument put forward by banks over the N120 billion debt owed telcos by banks for the Unstructured Supplementary Service Data (USSD) revealed the anomaly against bank customers.
Mr. Segun Agbaje, the Group Chief Executive Officer of Guaranty Trust Holding Company (GTCO), at a recently held interaction among banks, telcos and industry regulator, the Nigeria Communications Commission (NCC), opposed the notion that continuous use of USSD for transactions would strengthen Nigeria’s cashless policy as pursued by the Central Bank of Nigeria (CBN).
He said the controversy over USSD is a distraction engendered by telecommunications companies. He asserted that banks are advocating for the protection of their customers, insisting that they should only pay for successful transactions and not for transactions that were not calculated on their accounts.
The GTCO boss objected to the extensive use of USSD while expressing his belief that the technology driving USSD banking is costly and clumsy, adding that internet banking is a more robust and technologically advanced alternative.
“The banks are protecting their customers and saying to all of you, pay for successful transactions, do not pay for transactions that were not calculated on your account. What if you, as customers, want to take a swim? Perhaps we’ll let you pay, but I keep telling everybody, who would listen, USSD is not the answer,’’ Agbaje argued.
He further stressed the need to reduce the cost of data, thereby making it more affordable as the future of financial inclusion and increased literacy lies therein. He further urged for a transitioning into mobile banking, which he considered as more advanced and user-friendly, requiring less data consumption.
Citing the India example, Agbaje explained that India has achieved significant progress in financial growth, and reiterated the urgency to reduce the cost of data in Nigeria, pointing out the disparity between data costs in Nigeria and India.
“All of you, who use less data, or mobile banking, which is more advanced, which is easier to use, you need to get the cost of data down in Nigeria. The cost of data, when compared to India, shows we are being exploited,” he added.
Agbaje emphasized the need to reduce the cost of data as this would enhance financial inclusion and increase interest in the country.
“We should have the cost of data down so that we can increase inclusion, or we can increase our interest. So, I’m not going to get into this. If you want, you can pay the telcos for USSD. For me, my clamour is that it should be technology at lower cost of data,” he added.
A manager in one of the banks agreed with Agbaje’s statements concerning embracing mobile banking as opposed to the use of USSD for financial transactions, which, according to her, contributes to the high charges on transactions lamented by bank customers
“USSD is one of the reasons for high charges. Whether your transaction is successful or not, you will be charged N6.98k for using USSD, then you will be charged for transfers depending on the amount involved, the SMS alert charge is also included. That’s about three different charges for one transaction.
“Another way people incur extra charges is when they check their account balance. Every time you check your account balance via USSD, you will be charged N6.98k for USSD transaction and N4 for SMS alert.
“In a situation whereby you check your account balance five times a day, you have accumulated N20 SMS alert charge just in a day and N34.90k USSD charge in a day. To solve this problem, you can use your email to receive alerts and to confirm transactions instead of SMS. This way, you are charged for just ATM maintenance, ATM withdrawals after withdrawing thrice on another bank’s ATM and Electronic transfer levy.
“This is what I tell people, once you have a smartphone, it’s advisable to use the mobile application for transactions instead of USSD. USSD banking is expensive when compared with mobile banking, what the banks are clamoring against is charging our customers for unsuccessful transactions. All we are trying to do is to protect our customers against high charges,” she said.