Xtabella's Blog



Friday, 27 April 2018


The Central Bank of Nigeria, CBN, has announced a new regulatory framework for the use of Unstructured Supplementary Service Data USSD in the country’s financial system. The implementation of the new framework will take effect on June 1st, 2018. The apex bank hadearlier released the draft guidelines in September last year.
Under the new regulation, the maximum daily transactions through the mobile phone USSD has been pegged at 100,000. However, customers desirous of higher limits shall execute documented indemnities with their banks or Mobile Money Operators MNOs.
The new regulation also makes the use of 2nd-factor authentication by customers mandatory for all transactions above 20,000. This shall be in addition to the PIN being used as 1st level authentication which applies to all transactions.
The new framework also warned banks not to send the second-factor authentication to the customer’s registered GSM number or device and shall not be displayed on the USSD menu.
Also, Financial Institutions shall be responsible for setting up dispute resolution mechanism to facilitate resolution of customers’ complaints.
Resolution of any customer related issues must be resolved within 3 working days. Non-compliance shall be subject to penalty as prescribed by the CBN.
It also directed service providers to put in place systems that enable users/subscribers to block their account from operating USSD service and no USSD financial service should be activated for a customer unless the deactivation mechanism is put in place with effect from June 2018
The appropriate Regulator (CBN and/or NCC) as applicable shall impose appropriate
sanctions for any contravention on any participant that fails to comply with the Framework.
The USSD technology is a protocol used by the GSM network 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 an asterisk (*) and ends with a hash (#).
It is considered cost-effective, more user-friendly, faster in concluding transactions, and handset agnostic.

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