Nigerian banks have yanked off their USSD, airtime purchase, and other online services from MTN network due to the disagreement between the financial institutions and the telecommunication company on the amount to be charged.
We gathered that the bank Chief Executive Officers had at a recent meeting agreed to shut down purchase of MTN services across all their channels beginning from 11 pm last night until further notice.
According to the story doing the rounds, MTN Nigeria on March 31, 2021 called its Aggregators into a meeting and announced a massive percentage reduction in its vending commission. A reduction that is half of the industry average, to be effective the next day, April 1, 2021.
MTN officials during the meeting stressed that they are worried about the growth of Nigerian Banks. As such, MTN’s plan is to outperform Nigerian banks and dominate the Nigerian business environment.
According to internal sources, this posture is based on a directive from its parent company to implement a market dominance plan which includes: 1) Controlling the Nigerian Telecoms and Financial Sectors, 2) Eliminating aggregators and squeezing margins from all third party contractors and business partners, 3) Preventing Nigerian Banks from winning the battle for customer engagement via its telecoms platform; and 4) Engaging Nigerians as lobbyist to exert more regulatory and policy concessions from Nigerian Regulators and Legislators.
The recent USSD pricing war sponsored by MTN with support from lobbyist and the new reduction in airtime discount rates is part of the company’s plan to curtail the financial inclusion initiatives of the financial sector and force the CBN to grant it a banking license to offer Financial Services based on its own terms and conditions. MTN’s use of lobbyist and practice of exerting aggressive margin pressure on business partners was the model used in Ghana, Benin, Uganda and Ivory Coast to achieve dominance in Telecoms and Mobile Money.
In Nigeria, MTN now intends to force aggregators and Banks to a lower discount to make up for its inability to charge a higher fee for USSD banking services. The Parent company is unhappy with CBN and NCC’s resolution of the USSD issue and has instructed MTN Nigeria to implement this new commission reduction to put further pressure on Nigerian Banks and its business partners.
MTN Nigeria’s objective is to dominate Telecoms, Financial Services and FinTech in Nigeria but it has been experiencing challenges in getting Nigerian regulators to grant it a blanket approval. It is therefore embarking on a series of initiatives to prove its systemic importance and force Nigerian regulators to agree to its own terms and conditions. This current battle with Nigerian Banks is likely to be one of several to be expected this year and beyond.
Attempt by THISDAY to purchase airtime from GTBank last night showed that the commercial bank had removed MTN among the network its customers could purchase airtime from.
A source close to the banks explained that the disagreement arose after MTN recently reduced the discount offered to banks on airtime sales from four per cent to 2.5 per cent, which did not go down well with banks considering the cost of managing the infrastructure and other operational costs they incurred.
According to an insider, over 60 per cent of airtime vending by telcos presently were done electronically through the banks.
The CBN and the NCC, had in a recent communique issued at the end of a meeting to resolve the disagreement on USSD fee between the banks and telcos agree that with effect from March 16, 2021, USSD services for financial transactions conducted at banks and all CBN- licensed institutions would be a flat rate of N6.98k per transaction.
This replaced the previous per session billing structure, ensuring a much cheaper average cost for customers to ensure financial inclusion.
“To promote transparency, the new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts. “Banks shall not impose additional charges on customers for the use of USSD channel. “A settlement plan for outstanding payments incurred for USSD services previously rendered by the MNOs is being worked out by all parties in a bid to ensure that the matter is fully resolved,” the communiqué explained.
