This picture taken on January 29, 2016 in Lagos shows 1000 naira banknotes, Nigeria's currency. - Nigeria's central bank governor, Godwin Emefiele, on January 26 dismissed calls to devalue the naira in his monetary policy committee statement. Instead he chose to continue propping up the currency at 197-199 naira to the dollar and maintain foreign-exchange restrictions. As a result, the naira on the black market is hovering around a record low of 305, fuelling complaints from domestic and foreign businesses who can't access dollars required for imports. (Photo by PIUS UTOMI EKPEI / AFP) (Photo by PIUS UTOMI EKPEI/AFP via Getty Images)
By David Akinmola
For millions of Nigerians, the Unstructured Supplementary Service Data (USSD) platform is the lifeline that keeps financial transactions within reach, especially in areas where smartphones and stable internet connections are luxuries.
From paying bills to sending money, USSD banking has become an indispensable tool in the country’s financial inclusion journey.
Yet, behind this convenience lies a growing problem failed transactions that drain customers’ pockets and test their trust in the banking system.
Every day, stories surface on social media about people who initiate transfers through USSD only to be debited without the beneficiary receiving the money.
Some customers wait hours, others days, and in severe cases, refunds take weeks or never come at all. The frustration is palpable because these losses often occur when funds are urgently needed, leaving customers stranded with no immediate recourse.
Industry experts say the problem is layered. While banks blame network issues, telecom operators point to system glitches, and the Central Bank of Nigeria (CBN) urges collaboration, customers remain the biggest victims.
According to data from the Nigeria Inter-Bank Settlement System (NIBSS), over two billion electronic transactions were processed in 2024, with USSD accounting for a significant share. However, the error rate for USSD transactions remains high, with estimates suggesting that for every 100 transactions, up to five fail or experience delays. In a country with over 60 million active USSD users, that’s a staggering number of affected customers.
Take the case of Chinyere Okafor, a small trader in Enugu. On a busy market day, she tried transferring ₦50,000 to restock goods from a supplier.
The transaction failed, but her account was debited instantly. “The bank said I should wait 24 hours. My supplier didn’t trust me; I lost the deal,” she recalls.
“I felt helpless because the money was gone and I couldn’t restock. I lost customers too.” Chinyere’s experience reflects a wider reality for many Nigerians who depend on instant transactions to keep businesses running.
The CBN has acknowledged these challenges but insists that banks and telcos must improve infrastructure reliability. In March 2025, the apex bank mandated that failed transactions be reversed within 24 hours for most cases, warning of penalties for non-compliance.
Yet, complaints persist. Consumer advocacy groups argue that refunds still take too long, and in some cases, customers are left to chase their money through tedious complaint channels.
At the heart of this problem is a fragmented system where multiple players—banks, telecoms, and payment processors—must coordinate seamlessly for USSD to work effectively. A slight glitch on any end can derail an entire transaction.
Telecom operators argue that they maintain robust networks and attribute most failures to bank servers or congestion during peak hours.
Banks, on the other hand, highlight infrastructure costs and the strain of handling millions of daily transactions. Meanwhile, customers care little for the blame game; they simply want their money and a reliable service.
The hidden cost of failed transactions extends beyond financial losses. It erodes trust in digital banking, discourages usage, and threatens the financial inclusion agenda. When customers perceive USSD as unreliable, they revert to cash-based transactions, reversing years of progress in building a cashless economy. For rural dwellers who lack access to bank branches or internet banking, USSD failures can mean being financially stranded.
Analysts warn that the stakes are high as Nigeria pushes toward 70% financial inclusion by 2030. “USSD is critical because it bridges the gap for those without smartphones or data access,” says Ibrahim Salisu, a fintech consultant. “If people lose confidence in it, we risk leaving millions behind.” He argues for a shared service-level agreement between banks and telcos, with clear penalties for any party that fails to meet uptime and refund timelines.
For now, customers have few options beyond filing complaints and waiting. Some try to avoid peak hours; others keep extra cash as a backup. But for the average Nigerian living on a tight budget, tying down funds in a failed transaction can mean missing meals or losing business opportunities.
As financial services deepen in Nigeria, experts say regulators, banks, and telcos must prioritize transaction integrity over profit disputes. Until then, the true cost of USSD failures will not just be measured in naira, but in lost trust—a currency far harder to restore than any bank balance.
