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USSD 'messed up' in Nigeria say startups

USSD 'messed up' in Nigeria say startups.

Entrepreneurs bemoan cost, access and regulation around Unstructured Supplementary Service Data (USSD).

Even though they believe that deploying USSD-powered services ought to be very easy, some founders of tech startups in Nigeria have criticised the deployment process, describing it as "messed up".

Lanre Adeloye, Co-Founder of health startup SaferMom, said the nightmare begins with the acquisition of the short code itself, something he said is expensive and beyond the reach of many startups in the country.

Adeloye added that even when startups are able to raise the funds required, it often takes a longer time, a minimum of six weeks, before they can procure the short code. And after the short code has been paid for, he said the Nigerian Communications Commission (NCC) can easily shut it down at will.

Beyond the challenge of procuring the short code, he explained that it may take a developer who is not conversant with USSD services about three months before a product could be fully developed.

He also expressed dissatisfaction over the predatory mode of action of some value-added service (VAS) providers.

"Most VAS providers want to make quick money and they are always looking for companies who will launch a USSD service with high volume. Companies like major banks such as Guaranty Trust Bank's *737#. This is so since revenue is shared between the telecom company, VAS provider and the initiator," Adeloye said.

A local FinTech solutions company eTranzact International Plc has partnered with various financial institutions to roll out a series of USSD-powered services with appreciable level of successes.

Using services launched telecoms subscribers can top up their lines via funds in their bank accounts; and customers are able to transfer funds from one account to another.

"USSD for the consumer is fast and easy to use even though we are also leaders in apps development for financial service and seeing a lot of usage increasing there, USSD continues to track effectively. We have just completed something with DSTV to make verification and payment on USSD easier," said Ifeanyi Abraham, eTranzact's head of public relations.

Observing the increasing interest of Nigerian startups in building USSD solutions, Abraham said the company's technology is now able to assist the tech entrepreneurs to roll out their USSD services.

One of the potential beneficiaries of USSD technology is Nigeria's gift card company SureGifts which like several others is working on launching USSD services in order to give, irrespective of the device being used, access to services.

"Due to how popular USSD is, we decided to build a USSD application that makes it easier for those with SureGifts card to check their gift card balance or use their gift card (voucher) to pay bills (such as airtime, electricity, toll, internet subscription etc.) on the go without having to go online. We are also exploring ways to make gift card redemption at merchant outlets happen via USSD," said Babafemi Lawal, Co-Founder of SureGifts.

According to NCC's 9-page Application for Short Code, an applicant must first procure a value added service (VAS) number or CBN License for Mobile Payment Operators (MPOs).

The commission is also requesting for a comprehensive list of telecommunication equipment associated with the service (including details such as names, model and manufacturer) together with an evidence of type approval from the NCC. The applicant must also present a network architecture which will show how the applicant plans to connect with the network operators.

For those who have received USSD approval in the past, NCC requires they submit a utilisation plan of the previously allocated short code range. Other documents required include memorandum of understanding, operating license, evidence of agreement with telecoms companies, proposed tariff plan, full payment for licenses and equipment approval.

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