For more than 20 years, banking in Nigeria has slowly moved from long queues and physical bank branches to a world of transaction that lives mostly on phones.
In recent times, online banking platforms, mobile apps and contactless payments have shaped the way people manage their money. Nigerians now expect speed, convenience and instant access to their money.
However, despite the strong push towards banking apps, Unstructured Supplementary Service Data (USSD) is widely used by many Nigerians. Some believe USSD is “old school” but its popularity is largely tied to issues of trust, accessibility and reliability.
Nigerians trust what works consistently. USSD does not depend on internet access, it works on basic button phones like “Tonasobe” as well as smartphones like “Android and iPhone”.
In Nigeria, when it comes to money, reliability matters more than appearance.
Why USSD is still a banking lifeline for Nigerians
USSD is often underestimated by most people because it does not look modern. There are no colourful dashboards or advanced integrations.
Yes, it looks very basic but that very simplicity is what gives it staying power. The resilience of USSD among Nigerians depend on its features which are:
- No internet needed: USSD does not need internet which makes it a reliable option in areas where network connection is weak or unstable.
- Applicable to all phones: USSD works on all phones, both basic and expensive smartphones. For many Nigerians, that matters a lot. Not everyone has access to the latest device, and banking should not depend on that.
- Quick and secure: USSD is quick and secure because it does not store information on the phone itself. The risk of certain security issues is reduced.
- Affordable: Transactions on USSD are straightforward. You dial, you follow the prompts and you are done. No heavy data usage. Data in Nigeria are costly. USSD does not depend on buying expensive data bundles. For someone managing limited income, that difference is important.
According to the Central Bank of Nigeria (CBN), between January and June 2024, Nigerians carried out 252 million USSD transactions with a total value of approximately ₦2.19 trillion which is roughly $2.8 billion US dollars (based on an average exchange rate of ₦780 to $1 during that period).
At the full year of 2023, 630.6 million USSD transactions was recorded with a combined value of ₦4.84 trillion and about $6.2 billion US dollars. These figures showed that while mobile apps was growing, USSD is still a core part of how millions of people access their money, particularly for users without smartphones or reliable internet access.
At the bank level in 2022, major Nigerian banks reported significant USSD activity, for example,
Access Holdings processed transactions worth ₦2.4 trillion and $3.1 billion US Dollars.
Through USSD, United Bank of Africa (UBA) handled ₦1.56 trillion and $2 billion US Dollars
Guaranteed Trust Holding Company (GTCO) processed ₦3.21 trillion and $4.1 billion US Dollars which was slightly down from 2021.
Together, these three banks managed roughly ₦7.19 trillion, $9.2 billion US Dollars in USSD transactions for 2022 alone.
These figures made it clear that according to CBN, USSD remains more than a “backup” option. It is still a central part of Nigeria’s digital banking ecosystem.
This is why many banks across Nigeria, Africa, Asia, and parts of Latin America still see a large share of their mobile transactions happening through USSD. In some cases, it is more than half.
Sometimes, the most valuable technology is not the most impressive one, it is the one that quietly keeps working day after day for the people who need it most.
USSD vs mobile banking apps: Key differences in Nigeria
It might be very easy to think of USSD and mobile banking apps as rivals, but the truth is they each serve their own group of users.
| Elements | USSD | Mobile Banking Apps |
| Internet Needed | No internet required. | Internet needed to use. |
| Device Compatibility | Works on all phones, even basic ones, (button phones). | Only works on smartphones. |
| Ease of Use | Very simple, just dial codes. | More options, can be a bit complicated. |
| Speed | Quick for simple tasks. | Fast but depends on internet connection. |
| Security | Safe, no information stored on phone. | Safe, users password, pins or fingerprints. |
| Cost | Very cheap, no data needed. | Can use data which may cost more. |
| Available Transactions | Basic actions like, balance check, money transfer, airtime purchase. | wide range, e.g. pay bills, view history, make investments. |
| Popularity in Nigeria | Still widely used, especially where internet is poor. | urban cities, and among smartphone users. |
Mobile apps are complementing USSD in Nigeria. It is not about clinging to the past, it’s about practicality. USSD gateway providers in Nigeria have helped banks keep a secure, accessible, and affordable way of connecting with millions of customers.
Confidence and Regulation of USSD Banking in Nigeria (2018-2025)
In Nigeria, USSD has been an important way for people to access banking, especially for those without smartphones or reliable internet, but for many users, trust in USSD depends on clear rules and protection from unexpected charges.
In 2018, the Central Bank of Nigeria (CBN) ensured banks resolved USSD transaction complaints quickly, within three days. It was meant to reassure users that if something went wrong, it could be fixed promptly. This was one of the important steps carried out by CBN in building confidence in digital banking.
Between 2019 and 2024, a disagreement between banks and mobile network operators came up over who should pay for USSD services which caused some confusion. Customers were often unsure how they would be charged or whether the system was fair.
In December 2024, regulators asked banks and telecommunication companies to pay outstanding debts estimated at ₦2.50 billion and they gave clear rules for future charges. This was to restore transparency and reassure users that USSD remained a reliable service.
Then in June 2025, the Nigerian Communications Commission, (NCC) introduced a major change. USSD charges would now be deducted directly from users’ airtime rather than their bank accounts, and only with the user’s consent. It was designed to make the cost of using USSD clearer and prevent surprise deductions. The regulators hoped that it will strengthen trust among Nigerians who rely heavily on USSD transactions.
These regulatory efforts from 2018 to 2025 clearly shows that regulators are aware that Nigerians need to trust the USSD transaction system by enforcing faster, dispute resolution, clarifying billing, and giving users more control over charges.
The aim is to keep USSD safe, reliable, and accessible particularly for millions of Nigerians who depend on it.
The Future of USSD Banking in Nigeria
In Nigeria, there is a growing interest in hybrid solutions that blend USSD with modern technologies. For example, banks are exploring ways to link USSD with app features or chatbots to give users more options.
Right now, however, these hybrid models are mostly experimental. Most chatbots in Nigeria work through apps or messaging platforms like WhatsApp, and USSD triggered app installs are not yet widely implemented.
What we are seeing in Nigeria is a gradual evolution where banks are improving USSD services and connecting them with other digital channels where possible. This shows that USSD is evolving.
Banks that invest in enhancing the USSD experience can continue to benefit from customer loyalty, wider reach, and engagement with undeserved populations.
Definitely, mobile apps and the internet will dominate urban areas and tech savvy users, but USSD will still be a vital part of Nigeria’s banking system for the next decade or more.
Its simplicity and reliability to reach everyone regardless of device or internet access means that USSD will continue to complement other digital banking channels, bridging the gap between modern technology and the financial needs of Nigerians.
