By Chijioke Ohuocha

ABUJA: Nigerian regulators have set a fixed fee for financial transactions made through mobile phones, replacing a billing system that has caused disagreements between telecom companies and lenders.

The Nigerian Communications Commission and the central bank said on Tuesday they agreed to a flat rate of 6.98 naira ($ 0.0183) per transaction to ensure financial inclusion and reduce costs.

Nigeria wants to open up its digital financial services sector, which will help millions of Nigerians who do not have a bank account. But regulation has been overtaken by intense lobbying from lenders seeking to protect their territory in the face of fierce competition and an increase in the number of borrowers renegotiating their loans.

The country has more than 20 lenders.

MTN Nigeria, majority owned by South African group MTN, operates Nigeria’s largest mobile phone network, serving approximately 76.5 million people.

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

But disputes over fees and responsibility to pay have often led mobile operators to withdraw their services.

Regulators said payments to mobile operators for providing the USSD service would be billed to customers of the bank and lenders would not charge additional fees.

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

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