POS business in Nigeria is currently one of the hottest businesses to start for the average Nigerian. Because of its ease of use and convenience, it is gradually taking over ATMs. In exchange for a fee or commission through a POS machine, a POS business or mobile money representative makes cash available to customers.
Due to the lack of ATMs in certain remote locations and the queues that people face at ATMs in Nigeria, people now prefer to look withdraw from the closes POS agent near them.
This post will provide a detailed look at the POS business in Nigeria. There are common issues and disadvantages to starting a POS business in Nigeria. We will also discuss the cost and how lucrative it can be. If you are interested in this business, then read on.
What is POS in Nigeria?
A POS (point-of-sale) machine is a device that allows merchants, retailers, and businesses to collect payment without having to use cash. POS machines, also known as terminals, are being used by Nigerian banks and fintechs (financial tech companies) to increase financial inclusion and provide financial services to the underbanked and unbanked populations of Nigeria.
With a POS center, you don’t need to go to a bank for most financial transactions. All you need to do is locate a nearby POS centre and you can perform your cash transactions there.
People who don’t have access to banks in their location can now enjoy these services, provided there is a POS centre nearby. This is especially important for rural and remote communities. This is why POS businesses are gaining popularity in Nigeria.
People who open a POS business in Nigera are often referred to as POS agents. POS agents earn commissions for completing authorized financial transactions on behalf of customers/consumers.
You don’t only have to make payments, withdraw, or transfer money with a POS in Nigeria. It can also be used for DSTV & GOTV payments, airtime recharge, and tax payments.
Services of a POS Business Agent in Nigeria
These services can be offered by a POS agent in Nigeria:
- Open new bank accounts
- Banks allow you to deposit and withdraw money.
- Send money
- Pay your bills for electricity, cable TV, tax, and airtime.
Is POS business in Nigeria profitable?
Starting a POS business is a good investment. Particularly if you have a business that is already in operation at the same location. It will reduce the capital required to start your business.
This is because POS centres are increasingly popular with people who want to avoid the stress of banks and do their financial transactions at a POS.
A POS business in Nigeria is very profitable because many remote areas don’t have banks branches. Therefore, POS agents have been the de facto banks. A POS agent or business does not need to market because they are visible in the public eye. Customers will always turn to them for their ease.
POS agents are now a viable alternative to visiting the bank, especially when it comes to cash withdrawals or transfers.
A POS business in Nigeria requires very little capital. You can make money as soon as you start the business. You will need a good location. Depending on where they are located and how trust is built with their customers, POS agents in Nigeria make between N7,000 and N10,000 per day.
How can you make money in Nigeria with a POS company? Every customer who uses your POS machine earns you a commission. Let’s say a customer wishes to withdraw N5,000. The transaction will be charged at N100 and shared with your POS Provider. The bank or company will take N40 and you can take N60 for your commission.
What is the cost of starting a POS company in Nigeria?
Starting a POS company in Nigeria is not expensive. The cost of starting a POS company will depend on whether you have secured a shop or not. It also depends on whether you are getting a POS system for free.
For a POS business to be established in Nigeria, the main expense is cash. These costs can be anywhere from N250,000 to about N150,000.
To get a new POS machine from some fintech companies or banks will cost between N65,000 and N140,000 only. However, some banks offer POS machines for free but you must meet their requirements.
What is the cost of a POS Machine In Nigeria?
The cost of a POS terminal in Nigeria will vary depending on which bank you are an agent for or where you buy from. There is no set price for POS terminals in Nigeria.
Prices can vary from N45,000 to N75,000 or more, depending on the model. Different POS machines can have different specifications, such as 2G, 3G or 4G.
POS charges in Nigeria
Below is a list of POS charges for Nigerian banks and companies. These charges may not reflect what you see when visiting your preferred mobile money agent service.
Most POS agents in Nigeria charge differently depending on the bank or company they are affiliated to. However, there is a trend in charges we have noticed across most POS centers irrespective of their banks.These charges are mostly either paid to the POS agent in cash or they deduct it from your account.
PS: Always ask the POS agent if the bank will still charge you after you have paid their charges because at times, even after paying the money, the bank also charges you.
N100 – N5000 = N100 charge
N5,001 – N10,000 = N200 charge
N10,001 – N20,000 = N300 charge
N30,000 – N40,000 = N400 charge
N40,000 – N50,000 = N500 charge
Where can I find POS Machines?
Only banks and other financial institutions in Nigeria can provide POS machines.
GTBank is one of the most popular financial institutions to obtain a POS machine in Nigeria. Access Bank, First Bank, UBA and Zenith Bank, OPay, Baxi, Monie Point, Kudi, Bankly, Zenith Bank
Which POS Agent in Nigeria is the Best?
These are the top companies that you should consider if you want to be a POS agent in Nigeria.
- GTB POS
- OPay POS
- Firstmonie POS
- Zenith Bank mobile money agent
- UBA POS
- Kudi POS
- Ecobank Xpress point
- Pay force
- Monie Point POS
- Quickteller Paypoint
Steps to Become A POS Agent In Nigeria.
The following steps will show you how to become a POS Agent in Nigeria.
Step 1. Determine the startup cost.
A lot of things can influence the startup cost for your POS business in Nigeria. You will consider factors like Location, Cost of POS machine, Startup Cash, and any other registrations required for you to operate a business legally in Nigeria. Bear in mind that the cost of getting a shop differs from location to location.
Also consider the bank you want to sign up with. Are they willing to give you POS machines for free or do you need to pay? Are their requirements expensive? These are just a few of the factors to consider when determining the cost of running this business.
Step 2. Get A location
Location matters for any business, not just a POS business. If you can situate it in a busy location, you will be better off. So consider a location that has a lot of people in it. Also, consider the proximity of your location to a bank or other ATMs.
Another thing to consider is how secure the location is.
Step 3. Cost Of Rent
Once you have gotten a location you like, search if you can still get a shop in the area. If you can’t, find out if you can get a shop in the location. If you can’t get a location, you can make a lockup POS tent and situate it in a space within the location.
Step 4. Register to be a POS Agent
Depending on your bank or financial institution, you might need to apply for POS agent status or for a POS device. This could be for outright purchase, lease, or free. Based on the requirements, commissions, and charges, you can determine which one is right for you.
Online applications for POS machines can be made or you can visit the bank or office. This process can take anywhere from two weeks to one month to complete.
Step 5. Raise Your Capital
Now that you know how much it will cost to start the business, you can calculate your startup costs. You only need to raise the cash you will give to people who will want to withdraw from your terminal.
Advantages of POS Business in Nigeria
Both the customers and business owners can reap the benefits of POS in Nigeria:
- Business opportunity for those looking for an alternative source of income
- Ease of making cash transactions without having to visit the bank.
- Encourages financial inclusion within the country
- Reduces the risk of theft exposure as people don’t need to have so much cash
- Increased sales for merchants who not only accept cash but also cash payments via a POS machine
Disadvantages Of POS Business In Nigeria
There are some disadvantages and challenges to owning a POS business in Nigeria.
- Robbery. Due to its nature (deals in cash), it is easy for criminals and robbers to get into the business. Also, on the part of POS agent, this business cannot afford a security guard so you should be careful with with how you move.
- Banking Networks can be a problem in this industry. It is important to ensure that the POS agent service that you choose has reliable network services. This is why some people have up to three POS machines.
- It is important that your POS devices (due to the unstable power supply) are charged at all times. It might be worth investing in a small generator.
- Agency banking lacks regulation: Agency banking is booming because of its lucrative nature. There’s no regulation. Some POS shops are located so close together that they can’t be seen from one another. The spacing between shops is not controlled by regulations. There is no set fee for POS agents, so charges may vary from agent to agent.
POS business in Nigeria can be quite lucrative depending on your location. I hope you found this post to be quite helpful. Want to check out other businesses you can do? Check out these hot business ideas you can do in Nigeria.