USSD code: Banks, others to make input on regulatory framework

The Central Bank of Nigeria (CBN) has said it would welcome inputs from stakeholders in the financial services industry to the draft of regulatory framework for Unstructured Supplementary Service Data (USSD).

In a statement issued by the Director of Banking & Payments System Department, Mr ‘Dipo Fatokun, the apex bank said it came up with the framework in furtherance of its mandate for the development of the electronic payments system in Nigeria.

Such inputs to the draft released last week, CBN said, are expected to come in on or before Thursday, September 21, 2017. It added that this is part of efforts to curb fraud through the use of short codes in the financial system in the country.

According to the framework, those eligible to use the USSD for financial services in the country are mobile money operators, who are eligible for issuance from the Nigeria Communications Commission (NCC) after meeting the necessary requirements of the NCC for the issuance; and others who would need a letter of comfort from the CBN before being considered for issuance of the short codes by the NCC.

The central bank noted that, “The mobile phone has become a veritable tool for enhancing financial inclusion with the advent of mobile payments, m-commerce, m-banking and other implementation for financial transactions based on mobile telephony.”

It also said, “The providers of mobile-based financial services have options of adopting varying technologies for enabling access and transmitting data including Short Messaging Service (SMS), Unstructured Supplementary Service Data (USSD), Interactive Voice Response (IVR), Wireless Application Protocol (WAP), stand-alone mobile application clients, and SIM Tool Kit (STK).”

The apex bank disclosed that recently, providers of mobile telephony-based financial transactions are increasingly adopting the USSD technology while the range of services supported by their mobile transaction services using the USSD channel is broadening rapidly.

Among financial services provided through the channel include account opening, balance and other enquiries, money transfers, airtime vending, bill payment, internet/mobile banking detail retrieval and one-time password.

The USSD technology is a protocol used by the GSM networks  to communicate with a service provider’s platform. It is a session based, real-time messaging communication technology which is accessed through a string which starts normally with asterisk (*) and ends with a hash (#).

USSD technology is considered cost effective, more user-friendly, faster in concluding transactions, and handset agnostic.

According to the apex bank, “This framework seeks to establish the rules and risk mitigation considerations when implementing USSD for financial services offering in Nigeria.”

As regards dispute resolution, the CBN said in the framework that financial institutions “shall be responsible for setting up dispute resolution mechanism to facilitate resolution of customers’ complaints.”

It further said they shall treat and resolve any customer related issues within 48 hours, warning that “non-compliance shall be subject to penalty, as may be prescribed by the CBN, from time to time.

“The CBN shall impose appropriate sanctions for any contravention on any financial institutions that fails to comply with this framework,” the bank said.

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