How to start a Lucrative POS Business in Nigeria

The POS business began in 2013 after the Central Bank of Nigeria released its guideline on operations and management. Since then, it has remained one of the retail channels of several commercial banks to make their banking services reach many people.

Starting up a P.O.S business can be very profitable if you stay close to any busy locations like markets and other busy streets and major roads, even if your location is closer to a bank its still possible one of this days their ATM machine can experience fault or un-able to dispense cash and you can really cashout big from this.

Although the Nigeria Inter-Bank Settlement System (NIBSS) data shows that there are about 307,000 PoS machines in Nigeria as of March 2021, only 167,000 were active. While agent banking promotes financial inclusion, it might not usher the nation into a cashless economy. Ironically, a random survey of several PoS points shows that cash withdrawals make up 90% of their daily transactions.

A unique advantage why you have of start a POS business is that it reduces stress, whereby customers can deposit money into different bank or withdraw money from any bank at a single spot in your location without having to visit any of the banks. And with this, you charge the customers for each transactions made and earn your money. Aside from withdrawal of cash and deposits, you can as well use it for Recharge Cards sale, Payment of Utility Bills, Data and Cable Subscriptions of various companies like PHCN, GOtv, DStv, Startimes and many others.

The cost of a POS machine in Nigeria is determined by the Bank or firm you choose and whether you want to be an agent or purchase the system directly. In Nigeria, there is no set pricing for point-of-sale terminals. Based on the features of the POS system, the prices can range anywhere from N40,000 and N60,000, and they can even reach N250,000. Various POS terminals have different specifications, such as 2G, 3G, 4G, and other features and functions.

A banking agent owns and operates a retail outlet. They conduct the financial transaction and allow clients to deposit, withdraw, transfer funds, pay bills, recharge airtime, inquire about customers’ account balances, and other related services.

According to the CBN, the requirements for starting a POS business include a valid means of identification, for example, a national ID card, voters card, active driver’s license or an international passport. A registered business name is also needed as well as a POS location, passport photographs, account number, phone number, business email address, and bank verification number (BVN).

Bank  POS Transaction Charges: Bank  charges 0.3% for POS withdrawals and a flat rate of N35 for all transfers. In addition, you will be charged 5 naira for every 1000 naira that you withdraw on behalf of a customer. Furthermore, N10 will be charged for any transfer between N100 and N2000, while N20 will be charged for any transfer above N2000.

Location: This is one of the most important things you must have thought about when deciding to run this business. A strategic location is a place where there are a good number of people who will need to perform simple financial activities. Remote areas, student environments, markets, and places where banks and automated teller machines (ATM) points are far from the people can be a perfect location to begin the business.

Get a Shop or Kiosk: This will serve as the local or nearest financial institution to the people where they can perform simple transactions like withdrawal, payment, bank transfer, etc. Your shop or kiosk should be designed in such a manner that it notifies people you’re running a POS business. You can achieve this with a small board put in front of your shop to alert customers from a far distance who are looking for a POS terminal.

Profitability: You can make #20,000 pure profits on a daily basis and some even in a much busier area makes 40-50k a day. I will proudly tell you all that during those times of covid-19 lockdown the only business that made gains and still continue to operate where P.O.S shops. The recent shortage of Naira in 2023 has seen PoS agents charge exorbitant fees for cash transactions. For example, in some places, for N1000 withdrawal, PoS agents charge N200-N400. Some charge N1000-N1500 for N5000 withdrawal and as much as N4000 – N6000 for N20000. At this rate, in a day, PoS agents can make up to N50000 – N10000 in profit.

However, your profit potential depends on your hard work and other factors like the pricing strategy, volume of transactions, and good customer relationships. To increase your chances of launching a successful POS business, make your services more enticing. You can offer a discount on referrals or offer free withdrawals up to ₦1,000.

The POS business is a very lucrative business with a lots of benefits in which you earn money by assisting customers/client to deposit, withdraw, transfer money, payment of Utility Bills, Data and Cable Subscriptions while charging them certain amount. The service charge for each costumers is at your own discretion, even though it is better you reduce your charge in order to attract more customers. So what are you waiting for, dive into the money pool now.

How to set up a lucrative POS Business, this information will show you all you really need to know, from getting the machine to renting a shop and also to start the transactions. This resource information will educate you on everything you need to know about POS (point of sale) transactions, it will help you to be able to navigate your way through and avoid mistakes, keep a good record and be able to identify if you are making profit or loss. Its packaged based on a personal operation of the terminal (Pos) and experience. It also helps you to know the dos and don’ts of the business.

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