Nigerian regulators have set a flat fee for financial transactions done via mobile phones, replacing a billing system that caused disagreements between telecoms firms and lenders.

Nigerian Communications Commission and Central Bank of Nigeria said on Tuesday they had agreed a flat fee of N6.98 per transaction to ensure financial inclusion and lower costs.

Nigeria wants to open up its digital financial services sector, which will help millions of Nigerians who do not have bank accounts. But regulation has been caught up with intense lobbying from lenders seeking to protect their turf amid stiff competition and a rise in borrowers renegotiating loans.

The country has more than 20 lenders.

MTN Nigeria, majority-owned by South Africa’s MTN Group, runs Nigeria’s biggest mobile phone network, serving around 76.5 million people.

A quick code, or unstructured supplementary service data (USSD), sent by mobile phone for transaction is critical for delivering services to Nigeria’s underbanked population in a cost effective manner, the regulators said in a statement.

But disputes over fees and who is responsible for paying has often led mobile phone operators to withdraw services.

The regulators said payments to mobile operators for providing the USSD service would be billed to bank customers and that lenders would not impose additional charges.

They did not disclose how much money was owed to mobile operators for the service under the old system, but said a settlement plan was being worked out.

Mobile operators had threatened to suspend lenders from using the quick code service.

Reuters