E-Financial
NCC, Others to Meet over USSD Charges
Nigerian Communications Commission (NCC), Central Bank of Nigeria (CBN), and Body of Bank CEOs are to meet to resolve the dispute surrounding charges for use of Unstructured Supplementary Service Data (USSD), the Nation reported.
First Bank USSD Account Opening
According to Wikipedia, ‘USSD, sometimes referred to as “Quick Codes” or “Feature codes”, is a communications protocol used by GSM (global service for mobile communications) cellular telephones to communicate with the mobile network operator’s computers. But it is now used for transferring cash and transacting other banking services by customers in line with the cashless policy of the CBN.
According to the Nation. the USSD services of the lenders include GTB’s *737#; First Bank’s *894#; Fidelity Bank’s *770#; Access Bank’s *901#; and UBA’s *919#. They all run on telecoms infrastructure.
While there is an initial charge of N50 by the bank, which will be retained, customers who use the USSD will be made to pay additional N4, which would have automatically translated to double billing.
The meeting, which would hold early in the new year, would be at the instance of the NCC and the CBN. It is expected, among other things, to end the bickering by the telcos over their denial to charge customers for using the platform for banking transactions.
The telcos had threatened to invoke the relevant sections of the Nigeria Communications Act 2003 by disallowing the banks further access to the USSD link over the conspiracy of silence by the relevant stakeholders after Dr Isa Pantami, Communications and Digital Economy minister, had ‘directe’ the NCC to bar the telcos from collecting charges for use of the infrastructure they built with their cash.
But a source in the NCC said the regulator had not abandoned the telcos.
“We are on top of the situation. We have not abandoned the telcos as alleged. You know the issue concerns multiple stakeholders. You will agree with me that it is not so easy to iron the matter because of this. But let me assure you that as a responsive regulator, we will collaborate with the CBN as we did during the 9mobile crisis to prevent any problem. You should also remember that this issue at stake touches that heart of the policy of the Federal Government,” the source said.
Gbenga Adebayo, chairman, Association of Licensed Telecoms Companies of Nigeria (ATCON), said the USSD channel has evolved from a telco exclusive channel used for only telco services, such as balance inquiry and recharges, to a channel being utilised for the deployment of financial, insurance, agricultural and government services, etc. The USSD channel is delivered using the Standalone Dedicated Control Channel (SDCCH) which is also used for call set-up, SMS set-up, and delivery.
Similar to the other telco services such as SMS, voice and data, network resources are utilised in the provisions of USSD services and as such there are significant costs associated with deploying and maintaining the service.
“The banks, however, identifying the convenience of delivering services to its customers over the USSD channel applied to the NCC for USSD codes to deliver these services. USSD Shortcodes were thereafter issued to the banks and as is expected, they became fully responsible for the charges associated with delivering services to their customer through these shortcodes.
“To accelerate the adoption of financial services on USSD, the banks partnered our members to zero-rate the USSD access to end-users, while the banks bore the cost for the provision of service,” he said.
Based on this arrangement, the banks took on the responsibility of billing customers and paid our members for use of the USSD infrastructure from the service fees deducted from the customer’s bank account.
These service fees charged by the banks were however far over the costs remitted to our members by the banks for providing the USSD platform and have since remained so.
“Following the issuance of the USSD Pricing Determination by the N CC which resulted in a price review of USSD service by our members, the banks stated that they would no longer pay for USSD service delivered to their customers and requested our members to charge customers directly for use of the USSD channel. This billing methodology where the Banks customer is directly charged USSD access fees by our members irrespective of the service charges that the bank may subsequently apply to the customers’ bank account is called “End-User Billing” which the banks specifically demanded that all our members implement. The banks, however, provided no assurances to our members that such service fees charged to customers’ bank accounts for access to bank services through the USSD channel will be discontinued post-implementation of end-user billing by our members,” Adebayo said.
He said the removal of these service fees by the banks would have meant that if bank customers were charged only the USSD costs communicated by our members per USSD session, bank customers will be paying far less than what they are currently being charged by the banks which in some instances are as high as N50.
“Our members were however concerned that the banks were unlikely to discontinue the USSD service fees charged by the banks when customers utilise the USSD channel thereby resulting in double and overbilling, whereby our members charge consumers for the USSD access from their airtime and the Banks still proceed to charge the same consumers a service charge from their bank accounts. In the interest of the consumers, our members challenged the implementation of end-user billing until a formal request for its implementation was received from the Body of Bankers Chief Executive Officers and several banks specifically demanding that end-user billing be implemented.
“In view of the opposition to the implementation of end-user billing by customers, our members, as responsible and responsive corporate citizens are committed to safeguarding consumer interests, and in this regard, we are willing to explore mutually beneficial solutions which ensure that costs associated with the provision of USSD services as determined by the NCC are fully recovered by our members and customers are not billed twice for the same service and by different institutions which is what end-user billing advocat
Central Bank of Nigeria (CBN) has announced that diaspora remittances through international money transfer operators (IMTOs) reached $4.22 billion between January and October 2024.
This figure represents a 61 percent increase, or $2.62 billion more than the amount recorded during the same period in 2023.
CBN Governor Olayemi Cardoso shared the figures during an interactive session with the Senate Committee on Banking, Insurance, and Other Financial Institutions at the National Assembly on Wednesday. “The year-on-year increase reflects significant growth,” Cardoso noted.
He also reported that remittances rose from $336 million in September 2024 to $402 million in October 2024 on a month-to-month basis.
Cardoso expressed optimism about continued growth in remittance inflows, saying, “The remittance inflows would continue to rise by the end of the year, given the current trajectory.”
He attributed the surge to improved efficiency in the remittance system, the positive effects of President Bola Tinubu’s policies, and increased trust among Nigerians in the diaspora to contribute to national development.
In addition to remittance updates, Cardoso addressed the state of Nigeria’s external reserves, which he said had grown to $42.01 billion as of December 12, 2024, from $38.35 billion on September 30, 2024.
“External reserves rose largely due to receipts from crude oil-related taxes and third-party receipts in Q3 2024,” he explained.
He added that Nigeria’s external reserves could fund over nine months of goods and services imports, surpassing the international benchmark of three months. “Our external reserves level is a robust buffer against shocks,” Cardoso said.
On the issue of cash shortages, the CBN governor reiterated the enforcement of the new policy imposing a fine of N150 million on any bank branch found distributing new naira notes illegally to currency hawkers.
Cardoso also shared his outlook for the Nigerian economy in 2025. “Distinguished Senators, as we conclude this briefing, I want to highlight that despite the challenges facing our economy, there are clear reasons for optimism,” he said.
“The gradual stabilisation of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”
This comes as the CBN continues to implement measures to strengthen the economy. On October 17, the apex bank reported that remittance inflows had risen to almost $600 million by the end of September, while on June 25, it granted eligible IMTOs access to trade on the official FX window.
The Nigerian banking sector has witnessed a concerning rise in fraudulent activities, with incidents of fraud in bank branches increasing by 31 percent in the second quarter of 2024.
This alarming statistic was disclosed by the Financial Institutions Training Centre (FITC) in its Fraud and Forgeries report, highlighting significant challenges to the integrity of the country’s financial system.
Fraudulent activities in Nigerian banks led to a staggering N42.33 billion in reported losses during the first half of 2024.
This sharp rise was driven by escalating fraud across multiple channels, most notably within physical bank branches.
The FITC report revealed that fraud in bank branches rose dramatically to N42.2 billion in the second quarter, compared to N133.9 million in the first quarter.
The FITC data also pointed to a massive 1,560.3 percent increase in computer and web fraud. Losses in this category surged from N24 million in the first quarter to N400.8 million in the second quarter.
In contrast, mobile fraud witnessed a significant decline, dropping by 59 percent from N216.4 million in the first quarter to N88.7 million in the second quarter.
Interestingly, no cases of ATM-related fraud were recorded during the period under review.
The figures also indicate a shift in fraudulent activities involving various financial instruments. Card fraud saw a notable decline of 47.66 percent, with cases dropping from 21,469 in the first quarter to 11,231 in the second quarter. Conversely, cheque-related fraud rose by 36.67 percent, increasing from 30 cases in the first quarter to 41 in the second quarter.
Mobile fraud recorded an even steeper decline in value terms, dropping by 99 percent from N21.6 billion in the first quarter to N216.36 million in the second quarter.
These figures suggest evolving strategies among fraudsters, with some methods becoming less prevalent while others gain traction.
Amid the rising tide of fraud, legal actions have also intensified. In one notable case, an Abuja Federal High Court issued a 30-day freeze on 818 bank accounts linked to a N10 billion cyberattack on a Nigerian bank.
The court’s directive, issued on October 15, 2024, was based on a motion filed by the police against James Akagwu Isaac and other suspects, including several financial institutions.
Analysts say the surge in fraudulent activities underscores the urgent need for heightened vigilance, enhanced security measures, and robust regulatory interventions in Nigeria’s banking sector.
While the decline in some fraud categories, such as mobile and card fraud, offers a glimmer of hope, the sharp rise in branch-based and web-related fraud highlights the evolving tactics of fraudsters.
To combat these threats effectively, experts recommend that banks must invest in advanced fraud detection systems, conduct regular staff training, and strengthen internal controls.
Collaboration between financial institutions, law enforcement agencies, and regulators will also be crucial in mitigating the impact of fraud and safeguarding the financial ecosystem.
The FITC report serves as a stark reminder of the vulnerabilities within the banking sector and the need for proactive measures to address them. Without sustained efforts, the rising trend of fraud could pose significant risks to Nigeria’s economic stability and the trust of consumers in the financial system.
Credit: Tribune
United Bank for Africa (UBA) Plc said it will utilise the net proceeds of its ongoing N239.4 billion rights issue to invest in additional digital technologies and business expansions that will strengthen the bank’s seven and half decades of impressive performance.
Tony Elumelu, group chairman, UBA,
UBA is offering 6.84 billion ordinary shares of 50 kobo each to existing shareholders at N35 per share. The rights issue is pre-allotted on the basis of one new ordinary share of 50 kobo each to every five ordinary shares held as at November 05, 2024.
The rights issue is scheduled to close on December 24, 2024.
Tony Elumelu, group chairman, UBA, said the primary objective of the ongoing rights issue is to strengthen the bank’s position as a pan-African banking industry leader and a highly rewarding institution for all stakeholders.
He said the group decided on the rights issue to ensure that shareholders continue to derive undiluted benefits from a stronger, more innovative and resilient pan-African banking group.
Elumelu said the rights issue would enable the bank to drive organic expansion and business growth within and outside Nigeria, while strengthening its international operations, adding that UBA recently signed an agreement to commence full banking operations in France.
According to him, with presence in key global financial hubs including the United Kingdom (UK), United States of America (USA), France and United Arab Emirates (UAE), the bank would deepen its global operations by investing more in these global markets and further extend its global reach.
He noted that, “With African subsidiaries contributing more than 50 per cent of the group’s overall performance, the bank would also make additional investments in existing African operations while exploring new opportunities. UBA currently has operations in 19 African countries outside of Nigeria.”
He pointed out that the bank’s expansion plan is driven by its philosophy of developing African businesses, noting that UBA is not only expanding its geographical reach, but also playing a strategic and pivotal role in the economic transformation of Africa as a continent.
He added that while the rights issue would enable the bank to meet the new capital requirements stipulated by the Central Bank of Nigeria (CBN), the net proceeds would put the bank in a better stead to expand lending to small and medium enterprises (SMEs).
He outlined that the bank would make substantial additional investments in technologies to consolidate its reputation as a cutting-edge financial services group and deliver a more robust customer experience.
To him, new investments in information and communication technology (ICT) would further strengthen the group’s digitisation and operational efficiency, thus fostering improving coordination and synchronisation amongst the various entities and delivering improved service delivery and customer satisfaction.
UBA said it plans to strengthen collaboration and partnership with TELCOs and FinTechs to drive technology-enabled initiatives across Africa that will improve intra-trade, remittances, and payments across Africa.
The bank added that it plans to broaden its payment capabilities to enable it to transform the way merchants collect payments by offering solutions that offer seamless, secure and user-friendly ways of managing and consummating transactions.
Elumelu reiterated the bank’s long-term strategy of becoming the undisputed leading and dominant financial services institution in Africa, with greater emphasis on Nigeria.
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