Millions Hit as Nigerian Banks Suffer USSD Glitches Over New Airtime Rule
- Millions of Nigerians face USSD banking disruptions, affecting transactions despite sufficient account funds
- Recent changes require airtime availability for USSD transactions, causing confusion and frustration among customers
- Stricter fraud measures and a new pricing structure deepen concerns over banking costs in Nigeria's digital ecosystem
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Millions of Nigerians are facing growing frustration after widespread disruptions hit USSD banking services across major commercial banks, leaving customers unable to complete transfers despite having money in their accounts.
The disruptions, which have affected customers of several leading banks including First Bank of Nigeria, Access Bank, United Bank for Africa, First City Monument Bank and Stanbic IBTC Bank, have sparked confusion among retail customers, traders and Point of Sale operators who rely heavily on USSD banking for daily transactions.
Source: UGC
Many users complained that transfers repeatedly failed even when they had sufficient funds, forcing some customers to visit banking halls for explanations.
New airtime requirement behind failed transactions
Industry insiders say the disruption is tied to a major overhaul of Nigeria’s USSD payment system and the introduction of stricter anti-fraud measures.
Under the new arrangement, successful USSD banking transactions now depend not only on the availability of money in a customer’s bank account but also on the availability of airtime on the phone number linked to the account.
Previously, banks deducted USSD charges directly from customers’ bank balances before settling telecom operators separately.
That framework has now been replaced with an End-User Billing system, according to a report by Punch.
Under the new model, customers are charged N6.98 for every 120-second USSD session, with the fee deducted directly from mobile airtime.
This means customers with little or no airtime on their SIM cards may be unable to complete transfers, regardless of how much money they have in their bank accounts.
A bank official at an FCMB branch in Lagos explained that many customers are still struggling because the industry is migrating to an entirely new billing structure.
At another First Bank branch in Oshodi, an official said a USSD transaction would automatically fail if the linked mobile line had no airtime.
Customers, POS operators count losses
The sudden changes have triggered complaints across Lagos and other parts of the country, especially among Nigerians who depend on USSD services due to poor internet connectivity or lack of smartphones.
Several customers expressed frustration that banks and telecom operators failed to adequately educate users before implementing the changes.
For many small business owners and roadside POS agents, the disruptions are already affecting daily operations.
A POS operator, Aderonke Adebayo, said customers now regularly complain about unsuccessful transfers, creating tension between service providers and users.
According to operators, repeated transfer failures are leading to delayed payments, missed business opportunities and growing distrust in digital banking channels.
The impact is particularly severe in Nigeria’s informal economy, where USSD banking remains one of the fastest and most accessible payment methods.
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Tougher fraud controls introduced
Beyond the billing changes, industry sources say tighter security measures introduced by regulators are also contributing to transaction delays and disruptions.
The Central Bank of Nigeria and the Nigerian Communications Commission recently strengthened collaboration to combat rising cases of SIM swap fraud and identity theft linked to bank accounts.
As part of the reforms, regulators introduced the Telecom Identity Risk Management Portal, which allows banks to verify whether a customer’s SIM card has been swapped, recycled or flagged for suspicious activity before approving transactions.
The Nigeria Inter-Bank Settlement System has also tightened rules guiding phone number changes linked to Bank Verification Numbers, limiting such modifications to one update in a lifetime.
Industry experts say the tougher checks are aimed at protecting customers from increasingly sophisticated electronic fraud schemes.
Fresh concerns over banking costs
The development comes amid broader changes in Nigeria’s digital banking ecosystem.
Recently, the Federal Government implemented a 7.5 per cent Value Added Tax on certain digital service charges, including USSD fees.
Although regulators clarified that the VAT applies only to service charges and not transferred funds, many Nigerians fear that the growing number of deductions could make banking transactions more expensive.
The latest reforms also follow the resolution of a long-running dispute between banks and telecom operators over unpaid USSD debts estimated at nearly N300bn.
Telecom operators had warned that the mounting debt threatened the sustainability of both the telecom sector and Nigeria’s digital financial system.
Source: UGC
With millions depending on USSD banking daily, customers are now calling for urgent intervention from regulators and financial institutions to restore smooth transactions and improve public awareness about the new system.
First Bank branch in Oshodi, an official said, a USSD transaction would automatically fail if the linked mobile line had no airtime.
Nigerians protest USSD deductions on failed transactions
Legit.ng earlier reported that Telecommunications operators in Nigeria have said they should not be blamed for charges on failed USSD banking transactions.
The Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, explained that telcos only provide the network that allows customers to connect to their banks.
Adebayo spoke during a radio programme hosted by Jimi Disu, where he responded to growing complaints about the N6.98 fee charged even when transactions do not go through.
Source: Legit.ng
