MTN Nigeria Communications Plc (MTN) is one of the biggest telecom companies in Nigeria, and Africa. MTN began operations in Nigeria in 2001. It became the first GSM (Global System for Mobile Communications) network in the country, following the Nigerian GSM auction conducted by the Nigerian Communications Commission (NCC) earlier in the year. Since MTN launched full commercial operations in Nigeria, it has known stupendous growth.

As part of its quest to expand its wide reach, coverage, and patronage, MTN (like other telecom companies) partnered with the commercial banks to deliver services that will enable their customers purchase airtime directly from their bank accounts. For instance, through electronic banking – mobile and internet banking facilities, including the use of bank mobile Applications (Apps), Automated Teller Machines (ATM), customers can seamlessly recharge their MTN lines. It is also possible to recharge your line without internet-enabled devices by simply using Unstructured Supplementary Service Data (USSD) codes.

MTN’s partnership with the banks is contractual, in that the banks are to earn certain agreed percentage from every recharge. However, from the reports, on Friday (Good Friday, 2 April 2021), banks removed MTN from their platforms following a disagreement over the sharing of fees. This means that MTN line users will not be able to buy airtime directly from their banks. It was alleged that the disagreement began after MTN reduced the percentage it remits to the banks for each amount of airtime from 4.5 per cent to 2.5 per cent.

But there seems to be more to it than meets the eyes.

While a resolution is expected, MTN is said to have announced an alternative means of recharge which includes the use of the services of already existing FinTech companies (financial technology companies). FinTech companies use technology to deliver financial services. Many Nigerians are already familiar with the use such platforms provided by the FinTech companies.

But what’s the good news for low income earners?

Undoubtedly, direct recharge from bank accounts brings commendable level of ease. Conversely, this ease has led to nearly addictive and seemingly uncontrollable level of expenditure by low income earners. An average person naturally finds that there is an unintended increase in the budget for airtime purchase within a given period. This tends to eat deep into their pockets and affects their savings. Perhaps, this might be one of the factors by which financial captivity may be defined.

Therefore, the news that the service is currently unavailable appears to be an Easter financial liberation for low income earners. Easter is a period Christians all over the world celebrate the resurrection of Christ from the dead. Generally, it is seen as a period of liberation. Thus, until the service is restored, the fracas may become a turning point in the financial lives of many seeking to regain their freedom from the “shackles” of direct line recharge from bank their accounts.

Stephen Azubuike
Author: Stephen Azubuike
Stephen is a lawyer with expertise in Commercial Dispute Resolution and Technology Law practice. He is a Partner at Infusion Lawyers. He has successfully argued cases from the High Courts of various jurisdictions to the Appellate Courts on behalf of financial institutions, other corporate bodies and multinationals. He has worked with a number of startup tech companies. He tweets @siazubuike.

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