Customers blocked as banks block MTN from banking channels

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A row between Nigerian banks and MTN prevented millions of subscribers from recharging their phones using USSD services on Friday. This was after the banks shut down the telecom company due to charges being made for the service.

MTN advised its subscribers to look for other ways to charge their phones without telling them about the problem.

“Dear customer, our bank top-up channels are currently unavailable. Please top-up using physical cards. We apologize for the inconvenience. Thank you,” a message read.

Another read: “Please note that some of MyCustomers may not be able to purchase airtime and data recharges through banks including MOD and myMTN App.

“Please appease MyCustomers and teach them how to use MTNTopit, MoMo Channels, and Debit Card options on MOD or myMTN App.”

Why the block?

Phone users expressed their frustrations online as the outage lasted through Friday.

A senior industry official who asked not to be named told PREMIUM TIMES that banks had halted service to protect their profits. He called the decision “tyrannical”.

“Banks have tried to remove the cost of using USSD, but are willing to cut subscribers to protect their own fees earned through the channel,” the source said.

“It only has to do with preserving bank profits, which are already substantial and growing despite the broader economic conditions.”

“The government needs to step in and settle this once and for all. Nigerian banks must stop their tyrannical posture. USSD has not been cut by MTN as far as I know,” the official said.

“Note that with their action, the banks are preventing customers from accessing their money to make legitimate purchases/transactions.

“Banks are focused on bullying everyone to maximize their revenue. Banks did not send formal communication to customers or MTN before taking this action.

MTN gets first hit

PREMIUM TIMES understands that there is a dispute between banks and telecom operators over what banks should earn with each recharge.

A source said telecom operators were seeking to cut banks’ share by nearly half, a move that banks have fought back against.

Banks argue that since they maintain the infrastructure through which top-ups are made, they deserve better.

In protest, banks decided to remove MTN services from their infrastructure in order to signal to telecom operators that they could bark and bite.

But another industry insider told PREMIUM TIMES: “The 42 billion they owe us (MTN and others), they don’t want to pay.

“Rather, they want to sneak it into a new pricing scheme so that customers unknowingly help them pay what they’ve already charged them. Of course we refused, that’s why they are fighting us now.

“Meanwhile, the overnight suspension of airtime sales by some banks is not limited to just USSD channels, but includes airtime purchases through all banking channels – banking apps, USSD codes banks, even debit cards.”

USSD feud with MTN and others

The Central Bank of Nigeria and the Nigerian Communications Commission on March 15 settled a row between banks and telecom operators over fees by imposing new charges for the banks’ short code service.

Known as USSD, it enables millions of Nigerians to use their mobile phones to access financial services daily.

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) said banks owed its members N42 billion and threatened to suspend service.

Since March 16, subscribers have paid 6.98 naira each time they use USSD for banking transactions. This arrangement angered customers and alarmed financial inclusion advocates.

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Regulators claimed that charging would “ensure a much cheaper average cost to customers to improve financial inclusion.”

A PREMIUM TIMES report showed that banks and telecom operators would make around 564 million naira in a year from the new mobile banking fees.

MTN spokesperson Funso Aina did not respond to calls or messages sent to him via SMS and WhatsApp.

Spokespersons for Access Bank and United Bank of Africa, Amechi Okobi and Ramon Nasir, did not respond to calls and text messages.

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