The Nation Newspaper

Tag: USSD

  • Banks, fintechs to take VAT on mobile, USSD transfer charges

    Banks, fintechs to take VAT on mobile, USSD transfer charges

    Banks and Financial Technology (Fintech) firms are to take Value Added Charge (VAT) on certain electronic banking charges from January 19.

    Charges on mobile banking and Unstructured Supplementary Service Data (USSD) transactions will attract VAT, and not the principal/ transferred amount. VAT is currently at 7.5 per cent.

    The key Fintech operators are Opay, Moniepoint, Palmpay, Kuda, among others.

    According to the notice announcing the development, the move is tied to a directive from tax authorities mandating financial institutions to begin VAT collection and remittance on fees charged on transactions.

    In a notice sent to customers on Wednesday afternoon by Moniepoint, informed users of the impending implementation of the VAT regime on certain electronic banking charges.

    According to the notice, the development is tied to a directive from tax authorities mandating financial institutions to begin VAT collection and remittance.

    “We would like to inform you of an upcoming government-endorsed regulatory change regarding Value Added Tax (VAT),” the notice stated.

    It added, “From Monday, 19 January 2026, we are required to collect a 7.5% VAT, to be remitted to the Nigerian Revenue Service (NRS) (formerly known as the Federal Inland Revenue Service).”

    A source within the industry said the other Fintechs will begin announcing the new policy from Thursday, and that Moniepoint only decided to inform its customers first.

    “It’s a policy that every Fintech will announce. It is not particular to Moniepoint. Its industry-wide,” the source said.

    The company disclosed that the tax will apply to “certain banking services,” including “electronic banking charges such as mobile banking fees (transfers), USSD transaction fees and card issuance fee.”

    However, Moniepoint clarified that not all banking-related transactions would attract the tax, noting that “services that do not attract VAT include: interest on deposits and savings.”

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     “Moniepoint is required to collect and remit VAT to the Nigerian Revenue Service (NRS),” the notice read.

    It further explained that the tax authority had issued a clear timeline for compliance across the financial sector.

    “The NRS has communicated a deadline for 19th January 2026 for all financial institutions (commercial banks, microfinance banks and electronic money transfer operators) to start collecting and remitting VAT,” the statement said.

    Moniepoint also emphasised that the VAT would be limited strictly to service charges, stating that “VAT applies only to banking or service fees, not interest.”

    Customers were also informed that the deductions would be clearly itemised, as “VAT charge will appear separately on your transaction reports and statements.”

    The new VAT enforcement is expected to affect millions of Nigerians who rely daily on mobile banking platforms and USSD services for financial transactions.

  • USSD: When Telcos quietly dip into your airtime

    USSD: When Telcos quietly dip into your airtime

    • By Elvis Eromosele

    Sir: In Nigeria, one phrase captures the endless stream of troubles that trail daily life: “Wahala no dey finish.” This timeless street slang now finds fresh relevance in the realm of mobile banking, especially with the storm brewing between telcos, banks, and the supposed “saviour” in between, the Nigerian Communications Commission (NCC). After years of battles over who should bear the cost of USSD transactions, the NCC made a grand intervention: going forward, customers would pay USSD fees directly from their airtime, not their bank accounts.

    At first glance, this appeared like a clear-cut win. No more bank debits. No more inter-corporate disputes spilling into the public domain. The problem, however, is that while the squabbling giants may have agreed to stop fighting, it’s the unsuspecting Nigerian consumer who is now being short-changed, quite literally.

    The NCC’s policy to move USSD charges directly to consumers’ airtime accounts was heralded as a user-friendly solution. With this move, telcos could now collect fees instantly, sidestepping the previously convoluted billing process that required bank involvement.

    On paper, the process seems fair: you initiate a USSD banking session, you’re charged N6.98 for the service, and you proceed to complete your transaction. In reality, however, this is where the chaos begins.

    Today alone, I attempted four USSD transactions on my mobile phone. Not one of them completed. The system failed at various points, some before I could input my PIN, others at the point of confirming the amount. Yet, for each attempt, I received the same cheerful text message: “Your last USSD session was successful and charged at N6.98…”

    Successful? Really?

    Let’s break this down. Transferring money via USSD is typically a six-step process: (1). Dial the code; (2). Select transfer option; (3). Input account number; (4). Confirm name/amount; (5). Enter PIN; (6). Transaction completed.

    My session failed between step 3 and 4, yet the N6.98 was deducted by the second step. Where’s the value in that?

    This is the critical question: If a USSD transaction fails, and value isn’t delivered, no money sent, no confirmation received, why should users still be charged? It’s akin to paying a taxi fare for a trip you never took. Worse still, there is no obvious path to recourse or refund.

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    While banks previously handled disputes with some structure, telcos are not exactly known for efficient customer care. You call, you queue, you explain, and in the end, you get told to “try again later.” So, are we now in a system where users get taxed for failed services with no accountability?

    In Lagos parlance, “one chance” refers to a fraudulent situation disguised as legitimate transport. Many Nigerians are beginning to feel that this new USSD billing system may just be the digital equivalent. You think you’re initiating a transaction, and boom, before you know it, your airtime is gone and you have nothing to show for it.

    Even more worrying is the absence of a seamless complaint resolution channel. If a telco charges you repeatedly for incomplete sessions, who do you report to? NCC? The telco’s customer service? Your bank? There’s a growing fear that the consumer is now trapped in a billing Bermuda Triangle.

    In my mind, to regain user trust and ensure fairness, several things must happen urgently: (1). Transparent Billing Logic: The charge must only apply after the transaction is successfully completed. It’s unethical to charge for an incomplete process.

    (2). Instant Refunds for Failed Sessions: Just like bank reversal notifications, telcos must auto-refund airtime where a session fails or terminates prematurely.

    (3). Centralized Dispute Resolution Platform: NCC must compel telcos to create user-friendly, time-bound dispute resolution platforms where customers can easily report and resolve airtime deductions for failed transactions.

    (4). Consumer Awareness Campaigns: Many Nigerians are still in the dark about this billing change. There must be a comprehensive public awareness initiative to educate users on how the system works and how to seek redress.

    (5). Monthly Public Report on USSD Deductions: NCC should demand transparency. Telcos must publish regular reports on total USSD charges, refunds processed, and customer complaints handled.

    From endless queues at the bank to USSD sessions that deduct airtime but deliver no service, Nigerians are once again caught in the web of poor systems and zero accountability. The NCC must step up. Telcos must clean up. And consumers must rise up, to demand fairness, transparency, and value for every kobo deducted from their airtime.

    •Elvis Eromosele,

    elviseroms@gmail.com

  • Nigerian researchers develop inclusive bus booking system using USSD web integration

    Nigerian researchers develop inclusive bus booking system using USSD web integration

    In a groundbreaking step toward bridging the digital divide in public transportation, a team of Nigerian researchers has developed a hybrid bus booking system that combines Unstructured Supplementary Service Data (USSD) with web-based technology—making it accessible to both smartphone and feature phone users.

    The study, titled “Implementation of Secure User-Centred Architecture for Bus Booking System Integrated with Unstructured Supplementary Service Data and Web Platforms,” was published in the Journal of Science, Technology, Mathematics and Education (JOSTMED), June 2020. It was co-authored by Abdulkareem Sulaiman Aliyu, Shefiu Olusegun Ganiyu, Isah Olawale Mustapha, and Sule Ajiboye Salawu—from leading Nigerian institutions including the Federal University of Technology Minna, Al-Hikmah University, and Aminu Saleh College of Education, Azare.

    The research addresses a critical issue in African urban centers: how to create scalable, secure, and inclusive transport solutions in a tech-diverse society.

    “In many parts of Nigeria and across Africa, people still rely heavily on feature phones. We wanted to build a system that doesn’t exclude those users, especially when it comes to something as essential as mobility,” Aliyu explained.

    The research introduces a user-centred architecture for a transport system that operates seamlessly across mobile web and USSD platforms. It allows users to book and confirm bus seats, receive schedules, and make payments—all without needing internet access.

    Security and accessibility were top priorities. The system employs encrypted user authentication and secure data transmission to protect sensitive user information. It’s also designed with a straightforward interface that even first-time users can navigate easily.

    Experts in urban mobility have hailed the project as a potential game-changer for low-income and rural populations, where internet penetration is limited but the need for efficient public transport remains high.

    With Nigeria and other African nations pushing for smart city initiatives and e-government services, the researchers believe their system could be adopted not just for buses, but for other sectors including healthcare, utilities, and disaster response.

    The study also calls on governments and transport agencies to collaborate with local developers in integrating the architecture into existing transport infrastructure.

    “We see this not just as a tech solution, but a policy-relevant tool that can transform how African cities manage public services,” Aliyu added.