This is Follow the Money, our weekly series that unpacks the earnings, business, and scaling strategies of African fintechs and financial institutions. A new edition drops every Monday.\u00a0<\/p>\n
For years, USSD (Unstructured Supplementary Service Data) was the poster child of financial inclusion; every digital payment solution ultimately got a USSD code. The low-tech bridge brought millions without smartphones or internet access into the digital payment net. However, its relevance is now fading as mobile apps take over.<\/p>\n
GTCO\u2019s *737#\u2014which helped popularise USSD\u2014processed \u20a6987 billion<\/a> ($676.97 million) in H1 2024. One year later, that figure dropped to \u20a6499 billion ($342.26 million), with transaction volumes crashing 64% from 137 million to 49 million.<\/p>\n Visualising GTCO\u2019s Pivot: The Shift from USSD to Apps<\/p>\n \n Between H1 2024 and H1 2025, GTCO\u2019s data captures a dramatic digital *737# (USSD)<\/p>\n \n H1 2024 \n H1 2025 \n \u25bc 49.4% Value\n <\/p>\n Mobile Apps<\/p>\n \n H1 2024 \n H1 2025 \n \u25b2 19.3% Value\n <\/p>\n \n Note: Chart shows change in transaction value. The article notes a Industry-wide, USSD transactions fell to \u20a62.19 trillion ($1.50 billion) in H1 2024 from \u20a64.84 trillion ($3.32 billion) in the previous year, according to the Central Bank of Nigeria<\/a>. Transaction volume dropped by more than half, from 630.6 million to 252.06 million.<\/p>\n Nigeria\u2019s \u20a6100 Trillion+ Payment Shift<\/p>\n \n The move from USSD to apps is the entire industry. See the opposing USSD Transactions<\/p>\n \n H1 2023 \n H1 2024 \n -54.8% Value\n <\/p>\n Mobile App Payments<\/p>\n \n Q1 2024 \n Q1 2025 \n +33.65% Value\n <\/p>\n \n Note: Timeframes differ (H1 vs Q1) but show year-on-year trends. In contrast, mobile app payments have picked up. Transaction values jumped 33.65% to \u20a6104.07 trillion<\/a> ($71.38 billion) in Q1 2025 from \u20a677.87 trillion ($53.41 billion) a year earlier. GTCO\u2019s own apps\u2014GTWorld and GAPS\/GAPSLite\u2014handled \u20a635.8 trillion<\/a> ($24.56 billion) in H1 2025, a 19.33% jump from the previous year.\u00a0<\/p>\n This shows that as smartphones become cheaper and mobile banking apps more stable, Nigerians are quietly trading short codes for full digital experiences, as the financial system matures. The rails that once powered inclusion through telcos are giving way to bank-owned ecosystems built for scale, data, and recurring revenue.\u00a0<\/p>\n The code that changed banking<\/p>\n Around 2016<\/a>, Guaranty Trust Bank, Nigeria\u2019s most cost-efficient bank, launched *737#, allowing customers to transfer money without a smartphone or app. It became the face of a fast and simple movement that was built on the back of telecom expansion.<\/p>\n \u201cThe introduction of USSD changed everything. Without telecoms infrastructure, there is no USSD code,\u201d said<\/a> Zenith Bank\u2019s Group Managing Director, Ebenezer Onyeagwu, during the 20th anniversary of Nigeria\u2019s telecoms revolution in 2021.\u00a0<\/p>\n By 2020<\/a>, over 762 million transactions were carried out via USSD, according to the Nigeria Inter-Bank Settlement System (NIBSS). At its peak, telcos said 90%<\/a> of USSD traffic was driven by financial transactions.<\/p>\n More smartphones, more mobile transactions<\/p>\n USSD was built for a 2G world that Nigeria is fast leaving behind. Basic phone connections (2G) have dropped from 60.85%<\/a> in July 2023 to 38.38% in August 2025. Smartphone connections now exceed 60%, fuelled by Chinese phone makers like Transsion and Xiaomi, which have driven affordability and access.<\/p>\n The Great Phone Crossover: Nigeria\u2019s Shift to Smartphones<\/p>\n \n The decline of USSD is directly linked to the technology in people\u2019s hands. Basic Phones (2G)\n <\/p>\n Smartphones\n <\/p>\n \n This shift is the engine driving users from USSD codes to mobile banking \u201cSmartphone penetration is increasing, and without USSD, people will probably be fine,\u201d said Adedeji Olowe, founder of Lendsqr, a lending-as-a-service platform.\u00a0<\/p>\n Despite this, six<\/a> in ten Nigerians remain offline, especially in rural areas. Only 39% of people in rural areas had smartphones compared to 73% in urban areas in 2024. This gap suggests USSD\u2019s obituary might still be premature.<\/p>\n Biggest losers<\/p>\n USSD opened the door to inclusion, but its infrastructure\u2014and economics\u2014were owned by telcos.<\/p>\n Since 2019, both sides have been locked in a dispute over payment terms, with bank debts to telcos crossing \u20a6200 billion by 2024. A 2025<\/a> compromise allowed telcos to deduct \u20a66.98 per 120 seconds directly from customers. But by then, the market had already moved on.<\/p>\n For banks, the math is simple: apps make money; USSD doesn\u2019t. GTCO made \u20a628.61 billion<\/a> ($19.62 million) in e-banking income in H1 2025, while Access Bank made \u20a6101.65 billion<\/a> ($69.72 million). None of that came from USSD.<\/p>\n As Segun Agbaje, GTCO\u2019s CEO, once put it<\/a>,\u201d It is not state-of-the-art. The best way to have financial inclusion is to crash the cost of data so that data becomes more affordable. Then we can use what is a superior technology.\u201d\u00a0\u00a0<\/p>\n Banks\u2019 tech bet pays off<\/p>\n Banks did not get here in one day, as they have been making strategic investments in their tech capacity. \u00a0Six<\/a> of Nigeria\u2019s biggest banks increased their combined tech spend by 74.5% to \u20a6268.7 billion ($184.29 million) in 2024 to fund upgrades to core banking systems, digital channels, ATM networks, databases, and fraud detection.<\/p>\n GTCO<\/a> alone grew its tech budget by more than 450% since 2021 to \u20a637.76 billion ($25.89 million) in H1 2025 from \u20a66.85 billion ($4.67 million).<\/p>\n These investments have helped banks absorb the surge in instant payments, which jumped by 78.3% to \u20a61.07 quadrillion ($733.90 billion) in 2024 from \u20a6600 trillion ($411.53 billion) in 2023, and already at\u00a0 \u20a6284.99 trillion<\/a> ($195.47 billion) in Q1 2025.<\/p>\n
\n migration. Hover or tap each bar to see the change in transaction
\n value.\n <\/p>\n
\n \u20a6987B\n <\/p>\n
\n \u20a6499B\n <\/p>\n
\n \u20a630T\n <\/p>\n
\n \u20a635.8T\n <\/p>\n
\n 64% drop in transaction volume for USSD.
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Source: GTCO H1 2025 Report, as cited by TechCabal.\n <\/p>\n
\n year-on-year trends for transaction values across Nigeria.\n <\/p>\n
\n \u20a64.84T\n <\/p>\n
\n \u20a62.19T\n <\/p>\n
\n \u20a677.9T\n <\/p>\n
\n \u20a6104.1T\n <\/p>\n
\n
Source: Central Bank of Nigeria, as cited by TechCabal.\n <\/p>\n
\n See how phone connections in Nigeria changed in just two years.\n <\/p>\n
\n apps.
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Source: TechCabal, based on NCC\u2019s data.\n <\/p>\n