USSD Transactions in Nigeria Hit N2.19tn in First Half of 2024 Amidst Debt Challenges
Recent data from the Central Bank of Nigeria (CBN), highlights the continued growth of Unstructured Supplementary Service Data (USD) transactions, with 252.06 million transactions amounting to N2.19 trillion carried out between January and June 2024.
This marks a significant milestone, as the figure represents 45.3% of the total value and 40% of the total transaction volume recorded in 2023. In comparison, the full-year 2023 data showed N4.84 trillion transacted across 630.6 million USSD transactions. Initially developed for telecom services like airtime purchases, USSD has become a vital tool in Nigeria’s banking sector, providing financial services to users without requiring internet access. This makes it an essential component, of Nigeria’s financial inclusion strategy, particularly in rural areas with limited connectivity.
Despite its success, USSD services face challenges. According to Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria, (ALTON), he noted that banks have benefitted from USSD services but have failed to fully meet their payment obligations over the past six years.
Telecom operators are owed a staggering N250 billion for USD services. While,smaller banks have made some progress in repaying their debts, tier-one lenders, responsible for most of the outstanding amount, are yet to make significant payments. Adebayo has noted that while some repayments have been made, they remain far below expectations.
Beyond USSD, other electronic payment methods are gaining traction. Automated Teller Machine (ATM) transactions reached N12.21 trillion across 496,44 million transactions in the first half of 2024, showcasing their growing adoption. Similarly, point-of-sale (POS) transactions are also increasing, reflecting Nigeria’s gradual shift toward cashless payment solutions.
The unresolved N250 billion debt tied to USSD services continues to be a contentious issue. Addressing this challenge is critical to ensuring the sustainability of USD services and other electronic payment channels that drive financial inclusion across Nigeria.
