Nigerian banks have restricted transactions on USSD channels with Nigeria’s biggest mobile network operator, MTN Nigeria over a dispute on vending commission rate.
This restriction which took effect on April 1, 2021 was a result of the reduction of commission accruable to telecommunication Value Added Services (VAS) Aggregators and banks from 3.5 per cent to 2.5 per cent.
The aggregators alleged that had on March 31 informed them about the reduction in the commission earned by them which took effect the following day. Both the aggregators and the banks were uncomfortable with the new rate and the banks decided to restrict USSD channel transactions with MTN Nigeria to show their annoyance.
This new dimension is a dent on the recent resolution by both the telecommunications and banking industry regulators, the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) to resolve the USSD dispute which has lingered since 2019.
One of the aggregators alleged that MTN was bent on playing a dominant role in the digital financial services subsector in Nigeria and would do anything to limit the influence of the banks.
Reaction to the development, a telecom industry source who pleaded anonymity as he was not authorised to speak on the matter informed SiliconNigeria that “The overnight suspension of airtime sales by some of the banks was not restricted to USSD channels alone, but includes airtime purchases through all banking channels – bank apps, bank USSD codes, even debit cards.”
Another source, said “The current dispute by the banks and the telecom industry is as a result of the debt of N42 billion owed telecom operators by banks. They want to surreptitiously factor it into a new price regime so that customers will unknowingly help them pay what they had already billed them. Of course, we refused, which is why they are fighting us now. USSD has not been cut by MTN.”
According to him, banks did not send a formal communication to customers or to MTN before taking this action. With their action, the banks are denying customers from accessing their money to make legitimate purchases/transactions. The banks are willing to cut off services to customers in order to protect profits.”
In the last four years, the banks have made:
Bank Turnover Bank/ Earnings:
2017 – N148b/N8b 5.5%;
2018 – N240b/N13b 5.5%;
2019 – N320b/N14b 4.5%;
2020 – N470b/N18b 4%;
2021 – Projected N652b/N20b 4% Q1 & 2.5% YE.
The NCC had in 2018 carried out the licensing of Value Added Services (VAS) Aggregators in the bid to improve the service delivery framework and improve consumer satisfaction on value-added services. The framework was to ensure that telecom subscribers truly get added value when they sign up for such services, and that all stakeholders along the value chain are treated equitably so that the industry can grow.
The Commission had licenced about 233 registered operators in the VAS segment of the telecoms industry. It allocated Short Codes to the 233 VAS licencees for the provision of different VAS services which has immensely enhanced service delivery in the Nigerian telecom and financial services industries.
For instances, you can now recharge your mobile phone line, pay utility bills, make mobile Payments through VAS platforms. VAS has thus made life simple, contributed to the promotion of the financial inclusion policy of the government and facilitated the creation of wealth for many Nigerians.
According to the Executive commissioner, technical services, NCC, Engr. Ubale Maska, ““Anything outside your telephone call or text message we consider it as VAS. It is good for the industry because it has brought a lot of convenience.For instance, you can sit down and transfer money to any account with short codes without going to the bank to queue.”
Nigerian Banks Lift USSD Restriction As MTN Reverts Back To 4.5% Commission
- Extends Partnership with Fintechs
MTN Nigeria, commercial banks and aggregators have agreed to revert back to the old commission formula for airtime vending on unstructured supplementary service data (USSD) and banking app channels.
The three parties have reverted back to the old 4.5 per cent commission charged for airtime vending through USSD and other banking channels. They reached for each other jugular over an impromptu reduction in the commission rate from 4.5 per cent to 2.5 per cent which too k effect on Thursday April 1, 2021.
At virtual meeting held yesterday by the chief executive officer of MTN Nigeria, Mr. Karl Toriola; the group CEO of Access Bank Plc, Mr. Herbert Wigwe who is also the chairman of the Body of Bank CEOs in Nigeria; Group CEO of Guaranty Trust Bank Plc, Mr. Segun Agbaje as well as MTN Nigeria’s chief financial officer, Modupe Kadri, they agreed to revert back to status quo ante of 4.5 per cent commission on USSD airtime.
MTN CEO, Toriola and addressed to Wigwe which was a follow-up on the virtual stated that, “In an attempt to resolve the current USSD impasse, given the intervention of our regulators, we hereby agree that the banks revert back to the status quo of 4.5 per cent commission.
“However, the banks and MTN Nigeria Plc shall sit to agree on various options that will result in the costs on 6th of April 2021.” The letter was copied to the Executive Vice Chairman/CEO of the NCC.
Elaborating further, he said in another statement that “the document was issued by me to the banks on the specific intervention of the CBN Governor and the Minister for Communications and Digital Economy. MTN’s intention has always been geared towards business optimization to the benefit of our customers and indeed the country.
“This is evidenced by the fact that through the USSD imbroglio, we never denied access to our customers. In the current case, customers have been denied access to services by the banks despite having monies in their accounts to purchase those services. MTN will naturally do all it can to minimise customer pain. It is not just about revenue for us.
“The good of our customers influence every decision we take. The CBN Governor’s intervention is in line with our core values. We acceded to his request and that of our Minister. We will continue to live our values that ‘everyone deserves the benefits of a modern connected life,” he concluded.
Meanwhile, the operator with over 70 million subscribers said it will continue to engage Fintechs to vend airtime. According to Funso Aina, Snr. Manager, External Relations, MTN, the links to access the various alternative platforms include:
1. MTN On Demand is on *904# and also via https://mtnondemand.flutterwave.com;
2. Barter By Flutter Wave is an app that can be downloaded here: http://tosto.re/getbarter;
3. Jumia Pay (app);
4. OPay (app);
5. MTN Xtratime airtime loans (*606#);
6. Carbon (app);
7. Kuda (app);
8. BillsnPay (web https://www.billsnpay.com/. They also have an app);
9. myMTN Web http://mymtn.com.ng;
10. Momo agent *223#
The Apps can be downloaded from the Playstore and the Appstore.
Inlaks, First Bank Strengthen Ties as Bank Visits Technical Resource Centre
Inlaks, a foremost systems integrator specialized in the deployment of dynamic ICT Infrastructure solutions in Sub-Saharan Africa in its commitment to providing innovative products that will keep its customers at the forefront of novel banking operations recently hosted executives and some senior managers from First Bank of Nigeria PLC.
Its Executive Director, Infrastructure Business, Tope Dare, who spoke during the visit of the bank to the Inlaks Technical Resource Centre in Ikeja, Lagos, reiterated Inlaks’s commitment towards ultimately satisfying the bank by co-innovating value-adding financial services solutions with First Bank of Nigeria.
The courtesy visit is aimed at strengthening ties between Inlaks and First Bank which is one of Africa’s most formidable banking institutions ended in further agreements to co-create and launch world-class value-adding technology-driven solutions that will further enhance the services received by First Bank Customers across the continent.
Inlaks has heavily invested in building capacity to support FBN and other banks in Nigeria, Ghana, and some other selectAfrican countries with over 250 fintech, embedded systems, and renewable energy engineers servicing the bank across the continent. As of year-end, 2020 Inlaks had an ATM market share of 38% with over 8,200 Hyosung installed in both commercial and Micro Finance Banks (MFBs), FBN has 1500 Hyosung ATMs across Nigeria in over 650 business offices.
Inlaks Technical Resource Centre houses the Research and Development arm of the business and doubles as the hub for service delivery which includes a state-of-the-art call center, an ISO standard repair workshop, and a warehouse. This allows Inlaks to provide lighting fast services to all its partner financial institutions. The Technical resource center is the hub for is replicated at Abuja, Enugu, Ibadan, and Kano with more to be launched in 2021.
Top representatives from the First bank include Callistus Obetta, Group Executive, Technology & Services; Ayodeji Aina, Head Enterprise Innovation Unit; Abimbola Ibikunle Aina, Head, Branch Experience Management; Lande Atere, Group Head Branch Operations & Services,and Adewale Salami, Chief Technology Officer.
Speaking during the visit, the Group Executive, Technology & Services, Callistus Obetta, thanked the Inlaks team for being a trusted advisor, noting that First Bank is proud to be associated with the Inlaks brand in its drive to providing excellent customer services through its broad infrastructure solutions estate, a testament of Inlaks innovative product offerings.
Inlaks currently holds 40.9% of the industry market share for Datacenter build and maintenance, 100% for Fast Track ATMs, 65% for solar-powered mobile branch, and 100% for self-service kiosk banking services in Sub-Saharan Africa.
V Bank Launches Version 3.0 App With Innovative Features
V Bank, Nigeria’s foremost fully digital bank unveiled new and better features of its app at an online press briefing on Thursday, March 25, 2021 to kick off the financial year, as well as promote ease of use for its customers.
The new app, Version 3.0, boasts of exciting features including Cardless Withdrawals, Multiple Funds transfers, Recurring Transactions, Proximity Payments, Advance Budgeting and Intelligent airtime top-up.
The new VBank app will help users securely access their accounts to automate recurring bills, manage multiple cards from different banks, send and receive funds using a unique QR code, track daily, weekly and monthly spends, generate virtual cards for online payments and enable/disable and change pins for physical cards, all within a sleek, responsive, easy-to-use interface. buy airtime and data, fix deposits, set targets and make free transfers.
Speaking at the press briefing, Senior Product Manager V Bank, Ebere Ahaotu, “Virtual banking is all about supporting the needs of every user. We are committed to ensuring that all our customers find banking enjoyable and remain satisfied with the banking process thereby encouraging them to do more. That’s why it takes less than 2 minutes to set up an active bank account.”
According to Osifo Anosike, Head of Engineering at VFD Tech, ‘it was important for us to ensure that the app becomes even more convenient to use and that informed the design and features that we introduced or enhanced in this version. Building Version 3.0 was an opportunity to relearn what it takes to satisfy our users. We had a long list of requirements we wanted to work on but after collecting customer feedback over a couple of months, we were able to prioritize in such a way that the app delivers to the users what they truly need.”
Launched March 25, 2021, the digital bank has onboarded more than 250,000 individuals and businesses on its mobile banking platform across Nigeria, and processed transactions worth billions. The all-digital platform is most accessed in cities including Lagos, Anambra, Port-Harcourt, Abuja and Asaba.
“When we unveiled this product last March, we had no idea that the Covid-19 pandemic would sweep in greatly in Nigeria and that a great number of people would suddenly become more digitally reliant. We were simply being our innovative selves as a data-driven tech company with big dreams. And while it has been hard through the year 2020, our customers have made every single day of hard work worth it. We do hope that they find this version 3.0 truly useful and enjoyable,” said Azubike Emodi, Managing Director of VFD Microfinance Bank, owners of V Bank.
Internet-based banking has been an option since the 1990s, but the COVID-19 lockdowns of 2020 have hastened the transition in unexpected ways. As businesses adapt and a cultural shift takes place all around the world, V Bank takes its prideful place in the new world banking order, opening full-fledged bank accounts, verified via BVN, offering free transfers and providing loans to service the small business community all from the comfort of their homes. V Bank has been at the forefront of innovations in the banking industry, through its customer-led and industry-driven initiatives.
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