Bank Dispute Leaves Nigeria’s Biggest Telco In Dark

Most Nigerian lenders have cut off telco MTN Nigeria from their banking platforms following MTN reducing its commission it pays lenders for subscribers payment platforms by almost half, to 2.5 percent, Bloomberg reports.

That has led to many consumers not having the ability to buy credit for their phones. MTN is the biggest telecom services subscriber in the area with around 79 million subscribers. And banking mediums are the preferred medium for Nigerians to buy call credits for their phones, due to the convenience.

MTN Nigeria has agreed to restore the commission it paid lenders in response. An intervention from the central bank, along with the minister of communication and the digital economy, led to that happening.

The commission rate was then reversed to the 4.5 percent commission that it had been previously, according to MTN Nigeria Managing Director Karl Toriola, writing to a letter to the chairman of a group of bank chief executives.

On April 6, that group plans to meet again to resolve any disputes.

All of the lenders in Nigeria have removed MTN Nigeria except for Zenith Bank. Airtime sales were cut across almost all channels, including banking apps, USSD codes and debit cards.

Other telcos were not affected by the action.

Nigeria has been trying to get its citizens in on the digital shift, looking to capitalize on the rise in digital payments since the pandemic. The central bank is looking to capitalize on the “CBN Naira 4 Dollar Scheme,” which was created in order to boost the encouraging increase in diaspora remittances the country had been seeing, according to report.

The incentive plan would come with diaspora remittance recipients receiving five naira for every dollar sent through an IMTO licensed by the Central Bank of Nigeria.

Nigeria’s remittance market is worth around $4 billion annually, with the pandemic only expediting the need for more enhanced services, along with the country’s current shortage of cash.