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Introduction
A growing wave of frustration is spreading across Nigeria as mobile users question why they are still being charged for USSD banking transactions that fail to complete. The issue, which centers on a ₦6.98 deduction per attempt, has triggered public debate, regulatory attention, and renewed scrutiny of how telecom and banking systems interact in the country’s digital financial ecosystem. While many consumers see the charges as unfair, telecom operators insist the deductions are justified, pointing to infrastructure usage and service delivery costs that occur regardless of transaction success.
Summary of the Original
Telecommunications operators in Nigeria have defended themselves against rising criticism over the ₦6.98 fee charged on failed USSD banking transactions. According to the Association of Licensed Telecommunications Operators of Nigeria (ALTON), telecom companies are not responsible for the outcome of banking operations, but only for providing the communication infrastructure that enables USSD services.
ALTON Chairman Gbenga Adebayo explained that once a customer dials a USSD code, telecom resources are immediately activated. This means that network usage occurs even if the banking system fails to complete the transaction. He argued that the cost being charged reflects infrastructure usage rather than transaction success.
To simplify the explanation, Adebayo compared the process to taking a taxi to a destination: even if the destination is closed upon arrival, the transportation service has already been provided and must be paid for.
Regulators including the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) are currently reviewing the issue as public complaints continue to rise. Many Nigerians are demanding clearer rules on whether customers, banks, or telecom providers should bear the cost of failed transactions.
Adebayo also addressed related concerns such as data expiration and toll-free services. He explained that data plans come with validity periods and can only be rolled over if renewed on time. He further noted that toll-free numbers are not actually free, as companies fund them to cover customer call costs, but rising economic pressures are making such arrangements less sustainable.
He also pointed out broader structural challenges affecting telecom services, including poor electricity supply and frequent vandalism of infrastructure, which increase operational costs and affect service quality.
Meanwhile, a major development in the sector was the resolution of a long-standing ₦300 billion USSD debt between banks and telecom operators. Following regulatory intervention, the dispute was settled, and the industry has now shifted toward a model where USSD fees are deducted directly from users’ mobile airtime.
What Undercode Say:
The ongoing dispute over USSD charges highlights a deeper structural tension between Nigeria’s banking and telecommunications ecosystems. While users focus on failed transactions, operators emphasize infrastructure consumption, revealing a fundamental mismatch in how digital services are priced and understood.
From a technical standpoint, USSD is not a passive service. Each session triggers real-time network engagement, routing requests through telecom switches before reaching banking servers. This means that even a failed transaction still consumes measurable network resources, bandwidth, signaling capacity, and session management overhead.
However, the public frustration is not entirely about technical correctness. It is about perceived fairness. Users expect payment systems to charge only for successful outcomes, not attempts. This expectation aligns more with digital payment platforms than legacy telecom protocols like USSD, which were not originally designed for modern fintech use cases at scale.
The taxi analogy used by ALTON reflects an infrastructure-first perspective, but it does not fully address user experience expectations in a digital economy increasingly shaped by instant and outcome-based services.
Regulators are now in a critical position. The NCC and CBN must balance technical cost realities with consumer protection principles. If left unresolved, the issue risks eroding trust in USSD-based financial inclusion systems, especially among low-income users who rely heavily on feature phones.
Another key factor is the shift of USSD billing to airtime deduction. While this simplifies debt recovery between banks and telcos, it also transfers financial friction directly to users, making costs more visible and potentially more controversial.
Long term, this controversy may accelerate migration toward app-based banking solutions, reducing reliance on USSD. However, this transition is constrained by smartphone penetration gaps and data affordability issues.
The telecom sector’s broader challenges, including infrastructure damage and energy instability, further complicate pricing debates. Operators argue that these external pressures justify higher or unavoidable fees, but consumers rarely see these operational realities.
Ultimately, the dispute is not just about ₦6.98. It is about how digital infrastructure costs are communicated, allocated, and justified in a rapidly evolving financial system.
Fact Checker Results
✔ The ₦6.98 USSD charge claim aligns with widely reported telecom billing practices in Nigeria.
✔ Telecom operators do maintain that charges apply per session regardless of success or failure.
✔ Regulatory review by NCC and CBN on USSD billing has been publicly reported.
Prediction
In the coming months, regulators are likely to tighten rules around USSD billing transparency, possibly enforcing clearer disclosure of failed transaction charges. Consumer pressure may also push banks and telcos toward shared-cost or refund-based models. However, a full removal of charges on failed transactions appears unlikely due to underlying infrastructure cost realities.
🕵️📝Let’s dive deep and fact‑check.
References:
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