The Restrictions on USSD transactions by the CBN, A Move in Wrong Direction

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Digital transaction and electronic payment has come to stay. Though with the rate if adoption in Nigeria, which stakeholders have lauded but still the country is lagging behind some Eastern African countries in the level of adoption rate. The deployment of USSD banking has seen financial transaction done in places that there is no bank or internet connection only mobile network!

Growing so it might be , though with shortcomings like prone to scam and fraudsters. A move that the new Central Bank of Nigeria (CBN) is trying to curtail with the new restriction. A move industry watchers have said is a move in the wrong direction !

The new restrictions on USSD transactions by the CBN due to fraud is a dumb and backward move. The USSD channel was hugely dropping transaction cost, and CBN’s move will effectively truncate the progress we have made with USDD in Nigeria.

CBN keeps suppressing advancement in financial services in Nigeria using general restrictions as a security measure, anytime there is a security challenge.  The CBN lacks the capacity to create simple secured systems, so setting up restrictions is their lazy way out.

Restrictions don’t increase access to financial services, nobody wants to pass through the eye of a needle to use any service. CBN is hurting the system. With CBN it has always been the case of killing the patient instead of the disease. This is a reason why Nigeria is far behind in mobile money services in Africa despite low in financial inclusion.

The CBN has refused to allow the telco industry drive mobile money in the country, insisting on driving the sector through Banks, though it is a common knowledge that African countries (Ghana, Senegal, Kenya, Tanzania, Mali, Ivory Coast, Burkina Faso, Uganda, etc.) that have recorded successes with mobile money all have their mobile money industry driven by telco namely Orange, MTN, Airtel and Safaricom.

 

 

Uwagbale Edward Ekpu & Anthony Emeka Nwosu

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