This means that the bank will now have to pay 16% of the bank charge for transactions less than N5,000, 6.52% for a transaction between N5,000 and N50,000 and 3.26% for transactions above N50,000.
The new prices shows that Banks will lose more for transaction of N5,000 and lower while it will gain for transactions above N5,000 with the new regulations.
In general what this means is that Banks, just like Telcos, will suffer a drop in revenue generated from USSD.
Banks make billions of naira from general USSD transactions every year. In the first half of 2019 alone, GTBank made about N1,737.4 billion from about 265.1 million USSD transactions.
However, going by the new regulation, about N1.06 billion will be generatable by banks from USSD charges alone at the rate of N4 for the first half of 2019. But at the rate of N1.63, only about N432.1 million will be generatable. This means about N627.9 million will be lost.
Although the estimated losses would be borne mostly by Telcos, Banks could also share in the loss during negotiation. With the loss running into hundreds of millions, there is a possibility that the banks could find other ways to make users pay through charges like service and maintenance charges.
Tinuke, a business woman disclosed that her bank collect extra charges service charges due to large amount of alert message she receives due to her business.
Following the suspension of end-user billing, the Executive Vice Chairman of the NCC, Prof. Umar Garba Danbatta revealed that commercial banks in the country owe telecom companies over N17 billion in USSD charges.
While this revelation shows a reluctance by Banks to pay the USSD charges, the new regulations empower Telcos to cut them off if they fail to pay. The regulator also threatened a possible withdrawal of the USSD shortcode.
Refusal to pay for services provided or to negotiate in good faith will result in the discontinuation of the provision of the service, the possible withdrawal of the USSD shortcode by the Commission and/ or imposition of regulatory sanctions in line with the NCA, 2003
In summary, the new regulation is a piece of very good news for consumers but not so good for Telcos and Banks in Terms of revenue generated from the service. However, there is a possibility that the banks could find other ways to make users pay for the drop in revenue especially through service and maintenance charges.