The Brief History and the Rise of Banking through USSD Codes in Nigeria

In the recent years, the Nigerian banking sector has undergone lots of changes and has adopted new emerging technologies. Out of all these new technologies adopted, the adoption of USSD codes appears to be the one that completely transformed the sector. Before its adoption into the banking sectors, USSD codes are popular with telecommunication providers, serving as the means of activating and deactivating services.

Nigerians first meet USSD codes when MTN launched in the country around the year 2000, and since then codes to recharge credit and check credit balance are the most widely used in Nigeria. Around the time when USSD codes have become really popular on phone, banking transactions are mostly carried out in the banking hall.

Whether people want to send or receive?1000, they would have to go to the bank and queue up on the line. But thankfully when the automated teller machine (ATM) was introduced, withdrawer of money lower than?100,000 could be done without the need to go into the bank.

Instead, people would queue up in front of ATMs, which are strategically placed at different places across the country. The ATM was (and is still) really helpful, but to reduce queueing up in the front of the ATMs and make transactions faster, Nigerian banks started developing mobile apps.

The adoption of mobile apps for banking transaction was easier to implement because of the high proliferation of the Android phones in the Nigeria market; thanks to brands like Tecno, Infinix, and itel, which manufactured and sells cheap Android phones in the country. So Nigerian banks developed the Android (and iOS version) of their apps and customers are able to perform almost all banking transaction through the apps.

With most Nigerian banks mobile apps, customers are able to transfer money 24-7, buy airtime for their phone, and pay some bills. The only downturn of the mobile apps is that without internet, customers are helpless; customers wouldn’t be able to perform transactions.

Also, the Nigerian senior citizens (the old folks) that don’t know how to operate a smartphone, and the people that live in areas without internet network are also out of luck with the mobile apps. To finally resolve the challenge of customers queueing up in the banking hall, queueing up in front of ATMs, and the requirement for internet by the mobile apps, the Nigerian banking sector adopted what it called banking through USSD.

This initiative was possible through a collaboration between the Nigerian banking sectors and the telecommunication providers in the country. The collaboration was regulated by the Nigeria Communication Commission (NCC), and at the end, all Nigeran banks have supported banking through USSD.

A customer can now wake up in the middle of the night, open the dialer on his "torchlight phone" or smartphone, press a string of USSD codes, and within seconds, a banking transaction is successfully completed. That’s the convenience brought to Nigerian through mobile banking through USSD.

For a customer to bank through USSD codes, he must first go to his bank and linkup his phone number with his bank account number. When the linking is done, the customer is good to go. He can do almost all banking transaction through the codes. He can transfer money, recharge airtime, pay for bills, check account balance and more.

Banking through USSD code has made life easy for Nigeria, and it is here to stay.

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The author loves writing about phones, computers, and other gadgets. His aim is to make his reader smarter with their smart gadgets.