Nigerians have utilized Unstructured Supplementary Service Data (USSD) codes to send money totaling N2.19 trillion in the span of six months, as reported by the Central Bank of Nigeria. From January to June 2024, there were 252.06 million transactions conducted through USSD codes, amounting to N2.19 trillion. This figure represents 45.3% of the total value of USSD transactions in 2023 and 40% of the total transaction volume for the same year, where N4.84 trillion was transacted through USSD codes across 630.6 million transactions in 2023.
USSD services have been widely embraced in the banking sector due to its independence from an internet connection. Initially created by telecommunication companies for airtime and subscription services, USSD codes have played a vital role in Nigeria’s financial inclusion strategy, providing users with limited internet access a platform for quick and convenient transactions, particularly beneficial in rural areas with unreliable internet connectivity.
However, the effectiveness of USSD transactions has been impeded by over N250 billion in debt, a longstanding issue for the past six years. Despite past interventions by the Central Bank of Nigeria and previous ministers, including Godwin Emefiele and Isa Pantami, a lasting solution to this debt predicament is yet to be achieved. The Association of Licensed Telecommunications Operators of Nigeria Chairman, Gbenga Adebayo, expressed concerns over banks profiting from USSD services without meeting their payment obligations.
There has been some progress in the repayment of the N250 billion debt associated with USSD services, with smaller banks starting to settle their obligations. However, major lenders responsible for the majority of the debt have not made significant payments. While USSD remains a prevalent channel for transactions amidst challenges, other electronic payment methods have also experienced significant growth.
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