The debate over whether the Federal Competition and Consumer Protection Commission (FCCPC) Digital Economic Operations and Network (DEON) Regulations should apply to airtime credit has been ongoing for weeks, spanning courtrooms, op-ed pages, and regulatory press releases.
What has received far less attention is a more practical question: if telecommunications companies were to comply fully with the DEON framework as it stands, what would the airtime credit product actually look like?
The answer, buried in the operational detail of the regulations themselves, suggests that full compliance would not simply regulate the product; it would make the product unrecognisable. To understand why, it helps to start with how airtime credit works today, or how it worked before the suspension.
A subscriber dials a shortcode. Within seconds, the system checks their recharge history, makes an instant credit decision, delivers the airtime, and queues the advance for automatic recovery on the next recharge. There are no forms, no separate application process, no disclosure screen, no contract to review, and no interest to calculate. The entire transaction takes place within the telecom network’s billing infrastructure and is processed in real time, thousands of times a day. For lower-income subscribers, the value of the product is inseparable from that speed and simplicity.
Compliance friction collides with automated lending
Gazetted on 21 July 2025 under the Federal Competition and Consumer Protection Act 2018, the DEON Regulations impose a set of compliance requirements designed for digital lending applications. When applied to airtime credit, those requirements collide with virtually every aspect of how the product operates.
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The first and most consequential requirement is the prohibition of pre-authorised or automatic lending. Regulation 3 of the DEON framework explicitly bars lending without fresh, specific consumer consent for each transaction. Airtime credit, by design, is pre-authorised. The subscriber opts into the service once and then borrows repeatedly by dialling a shortcode.
The ability of the system to process the request automatically, without requiring the subscriber to review and accept terms each time, is what makes it functional for someone who needs ₦50 of airtime in the middle of a phone call. Requiring individual consent and disclosure for each micro-advance turns a two-second transaction into a multi-step process the product was never designed to handle.
Technical limitations of USSD interfaces
The second requirement is full disclosure of lending terms before and at the point of access. Under Regulation 17, lenders must display all fees, charges, repayment conditions, and contractual terms clearly on their platforms, and consumers must receive the complete terms before the service is activated. For a digital loan app disbursing thousands of naira via a smartphone interface, this is operationally feasible.
However, with a USSD-based service that delivers fifty naira of airtime to a feature phone, the interface does not support the volume of information required by the regulation. There is no app, no scrollable terms page, and no digital contract to present. The subscriber interacts via a string of numbers on a basic handset.
The third requirement is the mandatory intermediary structure. The DEON Regulations require that airtime and data lending services include at least one locally owned service provider and that all lending partnerships be jointly registered with the FCCPC. In practice, this means telecoms cannot lend directly to subscribers.
Intermediary layers add operational complexity
Operators must route the transaction through a DEON-licensed entity that sits between the operator and the consumer. This is the structural role that the five firms approved by FCCPC Chief Executive Officer on 22 April 2026 are intended to fulfil. The consequence is that a product currently operating as a direct, integrated feature of the telecom network’s billing system would need to be rebuilt around a third-party layer, adding operational complexity, processing time, and cost to every transaction.
The fourth requirement is to resolve complaints within 24 to 48 hours and to maintain accessible dispute-resolution channels. For a fifty-naira airtime advance automatically deducted from the next recharge, the complaint infrastructure required by DEON constitutes an overhead disproportionate to the transaction size. The cost of maintaining a compliant complaints system for millions of daily micro-transactions could exceed the revenue generated by those transactions.
Each of these requirements is reasonable when applied to its intended target. A digital loan app that disburses tens of thousands of naira, charges interest, accesses the phone contacts of a borrower, and employs aggressive debt collectors should be required to obtain consent, disclose terms, register with a regulator, and maintain a complaints process. These requirements exist because real people were harmed by real practices, and the 11,000 complaints the FCCPC received between 2021 and 2023 documented that harm in detail.
Redesigning a product out of service
Airtime credit is not that product. It charges no interest, accesses no personal data beyond recharge history, employs no debt collectors, and its recovery mechanism is automatic and invisible. Applying a compliance framework designed for one product to another does not regulate the second product; it redesigns it.
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The redesigned version—slower, more complex, routed through intermediaries, and burdened with disclosure requirements the delivery interface cannot support—is unlikely to serve the 40 million lower-income subscribers who used the original.
Regulation of digital lending is settled. What the DEON compliance requirements show, provision by provision, is that this regulation was designed for a different product. The 40 million subscribers who used airtime credit will bear the cost of that mismatch.
