On the brink
Nigeria's telecom regulator approved disconnecting 9 banks, including FCMB and UBA, from mobile banking services over unpaid debts.
The Nigerian Communications Commission (NCC) has approved Mobile Network Operators (MNOs) to disconnect the Unstructured Supplementary Service Data (USSD) codes of nine banks, including FCMB, Zenith Bank, and UBA, over unpaid debts. The banks have until 27 January 2025 to settle their outstanding invoices, some dating back to 2020, according to a directive from a joint circular issued by the Central Bank of Nigeria (CBN) and NCC in December 2024. Failure to comply will result in disconnection. The move highlights the banks' significant non-compliance with the settlement directives despite repeated warnings from the telecom regulator and the CBN.
The NCC cited regulatory non-compliance as the reason for the disconnection and that its action was intended to address a backlog of unpaid debts in the sector. This is unacceptable in any society because services have been rendered, and payments should be made. The friction between the telcos and banks has been longstanding and escalated several years ago when the telcos, led by MTN, wanted to replicate the mobile phone-based money transfer service model pioneered by Mpesa in East Africa. However, banks have developed initiatives like the USSD as a response to protect their space. Today, the telcos have obtained mobile money licenses from the CBN but have been unable to challenge the banks’ dominance over money transfers.