A significant shift in how millions of Nigerians access basic banking services came into force yesterday, mandated by the Nigerian Communications Commission (NCC). In a move with profound implications for financial inclusion, Deposit Money Banks (DMBs) are now compelled to deduct charges for vital USSD banking transactions not from bank accounts, but directly from users’ precious mobile airtime balances.

This fundamental restructuring, confirmed in communications from major financial institutions like United Bank for Africa (UBA), replaces the previous account-based billing model with the NCC’s controversial “End-User Billing” framework. The immediate, tangible cost for the average Nigerian? ₦6.98 for every 120 seconds spent navigating USSD menus to check balances, transfer funds, or buy airtime – a lifeline service for the vast, tech-light population. The telco becomes the taxman, billing this fee directly against the user’s airtime.

While the NCC mandates a consent prompt at the start of each USSD session (“Press 1 to proceed, charges apply”), critics argue this places an unfair burden on users already struggling with complex menus. The prompt appears before the service is rendered, forcing a cost-benefit analysis on the fly.

Deductions occur only upon user confirmation and service availability. However, this transforms essential airtime – often meticulously budgeted for calls and data – into a direct payment conduit for financial services. For low-income users operating on razor-thin airtime margins, this represents a significant new financial pressure point.

Banks explicitly state users who find the new cost prohibitive must “choose to discontinue use of the USSD channel.” This stark ultimatum rings alarm bells for financial inclusion advocates, as USSD remains the primary banking access point for millions without smartphones or reliable internet.

The poorest Nigerians, who rely heavily on USSD for basic financial survival and often operate with minimal airtime, will feel this ₦6.98 per minute charge most acutely. Checking a balance could now cost a meaningful chunk of their daily communication budget.

Years of progress bringing the unbanked and underbanked into the formal financial system via USSD now face a significant headwind. The new cost structure creates a tangible barrier to entry and continued use of these essential services.

Critics contend the pre-service consent prompt is inadequate. Users in urgent need of banking services (e.g sending money for an emergency) may feel coerced into accepting charges they can ill afford, lacking genuine alternatives in the moment.

This model significantly increases telcos’ role as financial gatekeepers, controlling the airtime purse strings through which essential banking fees are now paid.

Banking sources, speaking off-record, acknowledge the directive came from the NCC but express private concern about potential customer backlash and decreased USSD usage volumes. Telcos, now positioned as direct billers for these financial transactions, stand to gain a more predictable revenue stream but also face heightened customer service pressures related to airtime disputes.