GTCO *737# utilization falls 64% as Nigerians flip to cellular apps

That is Observe the Cash, our weekly collection that unpacks the earnings, enterprise, and scaling methods of African fintechs and monetary establishments. A brand new version drops each Monday. 

For years, USSD (Unstructured Supplementary Service Information) was the poster youngster of monetary inclusion; each digital fee answer finally obtained a USSD code. The low-tech bridge introduced tens of millions with out smartphones or web entry into the digital fee internet. Nonetheless, its relevance is now fading as cellular apps take over.

GTCO’s *737#—which helped popularise USSD—processed ₦987 billion ($676.97 million) in H1 2024. One yr later, that determine dropped to ₦499 billion ($342.26 million), with transaction volumes crashing 64% from 137 million to 49 million.

Business-wide, USSD transactions fell to ₦2.19 trillion ($1.50 billion) in H1 2024 from ₦4.84 trillion ($3.32 billion) within the earlier yr, in line with the Central Financial institution of Nigeria. Transaction quantity dropped by greater than half, from 630.6 million to 252.06 million.

In distinction, cellular app funds have picked up. Transaction values jumped 33.65% to ₦104.07 trillion ($71.38 billion) in Q1 2025 from ₦77.87 trillion ($53.41 billion) a yr earlier. GTCO’s personal apps—GTWorld and GAPS/GAPSLite—dealt with ₦35.8 trillion ($24.56 billion) in H1 2025, a 19.33% soar from the earlier yr. 

This exhibits that as smartphones turn out to be cheaper and cellular banking apps extra secure, Nigerians are quietly buying and selling brief codes for full digital experiences, because the monetary system matures. The rails that when powered inclusion via telcos are giving solution to bank-owned ecosystems constructed for scale, information, and recurring income. 

The code that modified banking

Round 2016, Warranty Belief Financial institution, Nigeria’s most cost-efficient financial institution, launched *737#, permitting clients to switch cash with out a smartphone or app. It turned the face of a quick and easy motion that was constructed on the again of telecom growth.

“The introduction of USSD modified all the pieces. With out telecoms infrastructure, there isn’t a USSD code,” mentioned Zenith Financial institution’s Group Managing Director, Ebenezer Onyeagwu, throughout the twentieth anniversary of Nigeria’s telecoms revolution in 2021. 

By 2020, over 762 million transactions have been carried out through USSD, in line with the Nigeria Inter-Financial institution Settlement System (NIBSS). At its peak, telcos mentioned 90% of USSD visitors was pushed by monetary transactions.

Extra smartphones, extra cellular transactions

USSD was constructed for a 2G world that Nigeria is quick forsaking. Fundamental cellphone connections (2G) have dropped from 60.85% in July 2023 to 38.38% in August 2025. Smartphone connections now exceed 60%, fuelled by Chinese language cellphone makers like Transsion and Xiaomi, which have pushed affordability and entry.

“Smartphone penetration is rising, and with out USSD, individuals will in all probability be high-quality,” mentioned Adedeji Olowe, founding father of Lendsqr, a lending-as-a-service platform. 

Regardless of this, six in ten Nigerians stay offline, particularly in rural areas. Solely 39% of individuals in rural areas had smartphones in comparison with 73% in city areas in 2024. This hole suggests USSD’s obituary may nonetheless be untimely.

Largest losers

USSD opened the door to inclusion, however its infrastructure—and economics—have been owned by telcos.

Since 2019, each side have been locked in a dispute over fee phrases, with financial institution money owed to telcos crossing ₦200 billion by 2024. A 2025 compromise allowed telcos to deduct ₦6.98 per 120 seconds instantly from clients. However by then, the market had already moved on.

For banks, the maths is straightforward: apps earn a living; USSD doesn’t. GTCO made ₦28.61 billion ($19.62 million) in e-banking earnings in H1 2025, whereas Entry Financial institution made ₦101.65 billion ($69.72 million). None of that got here from USSD.

As Segun Agbaje, GTCO’s CEO, as soon as put it,” It isn’t state-of-the-art. One of the simplest ways to have monetary inclusion is to crash the price of information in order that information turns into extra inexpensive. Then we are able to use what’s a superior know-how.”  

Banks’ tech wager pays off

Banks didn’t get right here in at some point, as they’ve been making strategic investments of their tech capability.  Six of Nigeria’s greatest banks elevated their mixed tech spend by 74.5% to ₦268.7 billion ($184.29 million) in 2024 to fund upgrades to core banking techniques, digital channels, ATM networks, databases, and fraud detection.

GTCO alone grew its tech funds by greater than 450% since 2021 to ₦37.76 billion ($25.89 million) in H1 2025 from ₦6.85 billion ($4.67 million).

These investments have helped banks take in the surge in immediate funds, which jumped by 78.3% to ₦1.07 quadrillion ($733.90 billion) in 2024 from ₦600 trillion ($411.53 billion) in 2023, and already at  ₦284.99 trillion ($195.47 billion) in Q1 2025.

Additionally they coincide with the decline of money transactions within the nation. Between 2014 and 2024, the nation noticed a 59% drop in money use. This mix of secure apps and decreased money dealing with means banks are actually extra absolutely incentivised to put money into their digital channels.

Not lifeless, but

GTCO nonetheless counts 3.1 million USSD customers—a 6.06% drop from H1 2024—however practically 3 million now use its apps, up from 2.5 million. This suggests that whereas the previous bridge (USSD) nonetheless stands, the visitors has shifted.

USSD walked so cellular apps might run and fly. However for the tens of millions nonetheless offline, it would proceed serving as their doorway into cashless transactions. Nonetheless, it’s now clear that Nigeria’s switch tradition has shifted.

Word: change fee used: ₦1,457.96/$