How to Start POS Business in Nigeria – Become a POS Agent in 2023
Today, one of Nigeria’s most lucrative business strategies is the point-of-sale (POS) business. After the Central Bank of Nigeria (CBN) implemented the agent banking system in 2013, the POS business began to develop in Nigeria 2013. A point-of-sale machine is a hardware system used to process card payments at retail sites.
POS business provides a new channel for financial services to set up businesses for people in rural areas with no banks. As a result, POS firms serve as a medium for financial institutions to reach out to previously underserved parts of society.
The POS system can also be used to move funds between bank accounts and pay utility bills.
However, the POS business in Nigeria solves more than just one issue. Nigeria and other developing countries rely on cash despite global efforts to move toward a cashless economy. Long lines and inconsistent network services at Automated Teller Machines (ATMs) point drive many people to search for other ways to receive money or conduct other bank transactions.
Aside from that, this transaction method allows bank users to withdraw money quickly when the nearest ATM is a long distance away. In other words, POS businesses make it so much easier for customers to receive the cash they require in exchange for a fee.
Many people are skeptical about how profitable the POS business in Nigeria may be. The market for this business, on the other hand, is broad and diverse, as it allows anyone with a bank account to carry out any transactions. It is, without a doubt, a lucrative business that so many are considering.
POS agents are not direct employees of banks and thus have authority over their business, even though banks offer a retail channel.
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During the pandemic, this business grew in popularity as many people who needed money during those periods could not get to the bank due to restrictions on gatherings near bank premises. The desire for cash has led to the numerous POS stands that can be found around Nigeria today.
People who engage in POS business in Nigeria are often referred to as POS agents. From every authorized financial transaction carried out for each customer, POS agents earn money from the commissions received.
Services Offered By POS Businesses in Nigeria
Here are a few services that POS businesses provide:
- Setting up a bank account
- Depositing money into any bank account
- Withdrawing money from any bank account
- Payments of utility bills such as airtime, electricity, water, and the likes
- Bank Verification Number (BVN enrollment)
Advantages of Owning a POS Business in Nigeria
1. Requires Very Little Capital to Start
Unlike most other businesses, the POS business in Nigeria does not require a substantial amount of money to start. To get started, you’ll need a minimum balance of N50,000.
The fact that you don’t need a massive shop to start the business reduces the start-up costs. Many businesses are as simple as a chair and table set up in a very conducive area in Nigeria.
2. Unlimited Number of Customers
Profiting from this business is extremely simple because the target market is a sizable portion of the Nigerian population. POS agents can conduct as many transactions as they want in a day and make a lot of money.
How to Become a POS Agent in Nigeria
Starting a POS business in Nigeria does not require a large amount of capital, and also you can start making money the very day you open your business. Just ensure you’re at a nice spot to gain customers quickly.
A POS agent in Nigeria can earn between N7,000 and N10,000 per day – this depends on location and how well they’ve earned confidence with their customers, especially those around their vicinity.
Setting up a POS business is simple and may be accomplished in as little as two weeks to a month if you meet the bank requirements for starting a POS business.
Here are the things to take note of:
1. Raise capital
As previously said, the firm requires very little capital. You also won’t have to worry about your shop’s furnishings being too expensive. A simple shop with a clear sign marketing your business is effective.
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2. Secure a Good Location
You will find densely populated places ideal for a business like this. Look for densely packed areas with access roads – such as markets, parking lots, and residential areas.
3. Complete the Official Requirements
The Central Bank of Nigeria has taken many protective measures to ensure the integrity of persons who qualify to be POS agents because financial services are a delicate area to deal with. You must have had an established business of any kind (in operation for at least 12 months) and a shop or office from which to operate.
4. Go to the Bank And Apply For The POS Machine
Choose the bank of your choice and contact them to learn more about their requirements. You can get a POS machine by purchasing, renting, or even for free if you apply to be a POS agent.
According to the official CBN handbook, you can be an agent for as many banks as you want. It’s required you to fill out all of the necessary paperwork and wait for your application to be granted.
You will need the following documentation for POS business:
- Passport photographs
- Current Account references
- Bank Verification Number (BVN)
- Evidence of business registration (CAC Certificate)
- A valid means of identification such as a Driver’s license, Voter’s Card, National ID Card, and International Passport
- A minimum capital of ₦50,000
5. Get the Equipment
After the bank has reviewed your application, the next stage is for the bank to provide you with the equipment and tools needed to run your business.
You will receive the POS equipment once your application has been granted, and you can begin delivering your services to customers.
ALSO READ: How To Get Free POS In Nigeria (2023)
List of POS Companies and Their Charges
When starting a POS business in Nigeria, it’s essential to understand the fees charged by each service provider. There are some hidden fees that you should be aware of.
Some research has been made on your behalf to reveal some of the charges from these companies.
Find out below the charges :
• Baxibox POS Charges
0.65% for withdrawals
N30 for transfer
• Payforce POS Charges
Deposit – N25
Withdrawals – (0 to N5000) = N30, (N5,001 to N16,500) = 0.6%, (N16,501 to N10,000) = N110, (N100,001 and beyond) = 0.11%
• Kudi POS Charges
Withdrawal – (below N4,500) = N25, (N4,501 to N25,000) 0.6%, (Above N25,000) = N150
Transfer – N45
• PayCentre POS Charges
Withdrawals – (0 -N10,000) = 0 55%, (N10,001 to N15,000) = N65, (N15,001 to N20,000) = N75, (N20,001 above) = N80
For Transfer – (0 to N5,000) = N10.5, (N5,001 to N50,000) = N26.25, (N50,001 above) = N50,00
• Moniepoint POS Charges
Withdrawal – 0.5% (N1000 to N19,900), N100 for (N20,000 to N1,000,000)
Deposit – N12
• KashZoo POS Charges
Withdrawals – (N1,000 – N5,000) = N30, (N5,001 to N10,000) = N15, (N10,001 to N20,000) = N76, (N20,001 to N40,000) = N85, (N40,001 to N1000,000) = N110, (N100,001 to N200,000) = N150
• Kolomoni POS Charges
Withdrawals – (N1,000 to N19,900) = 0.5%
Deposit – (N2,000 and above) = N100
Note: These rates are subject to change based on company and government policies.
Some Frequently Asked Questions About Starting a POS Business in Nigeria
Is POS Business In Nigeria Profitable?
Opening a POS business can be successful and lucrative on average, especially when you already own and operate another business with a physical presence. It lowers the amount of money required to establish this firm.
This is because many consumers visit POS centers daily to perform various financial transactions while avoiding the stress that banks can create.
In Nigeria today, the POS business is especially successful because many distant areas lack bank branches; therefore, POS agents have taken on the role of banks. A POS business needs to market as they are already in the public view, and customers would always seek them out due to the convenience they bring.
POS agents have now established themselves as a viable alternative to visiting the bank, particularly for transfers and cash withdrawals.
How do you make money from a POS Business in Nigeria?
In Nigeria, the POS business is extremely profitable, and this is mainly due to rural populations’ and isolated settlements’ lack of access to banks. POS agents receive a commission from each customer who uses their POS machine to generate money.
Let’s say a customer requests a withdrawal of N5,000. They’ll charge N100 for the transaction and pass the money along to the POS provider. They can charge N60 as a commission, while the bank charges N40.
What Is The Cost of a POS Machine In Nigeria?
In Nigeria, the cost of a POS machine varies depending on the company or bank you wish to be an agent for or purchase from, and there is no set price for POS terminals.
Depending on the POS machine’s specifications, prices might range from N45,000 to N65,000 to N75,000 and as high as N200,000. Various POS terminals have different specifications, such as 2G, 3G, and 4G, and other characteristics, which must be examined before choosing one.
The following banks are where you can get a POS machine in Nigeria :
- Polaris Bank
- Zenith Bank
- First Bank
- Access Bank
- Fidelity Bank
- Diamond bank, etc.
Each bank has its different way of doing things, so you’ll have to speak with them in person to find out what’s needed.
See: 10 Best Bank POS In Nigeria – 2023 Ultimate Guide
Which POS Agent is the best in Nigeria?
Below are some of the best POS agents in Nigeria. Consider rates and fees when choosing your agent.
- Monie Point POS
- Kudi POS
- GTB POS
- OPay POS
- Firstmonie POS
- Pay force
- Zenith Bank mobile money agent
- UBA POS
- Ecobank Xpress point
- Quickteller Paypoint
- Access Bank CLOSA agent
- Baxi Box
Learn More on 13 Best POS Machines in Nigeria: Your Perfect Solution ( 2023)
Where can I Establish a POS Business?
Rural Communities – You’ll agree that there are fewer banks and financial institutions in rural areas; thus, starting a POS business here would be a huge success.
Many parents would embrace this business as it provides more opportunities to transfer money to their children for school fees, maintenance, and other obligations without stress.
Others who must travel downtown to conduct transactions will be relieved. Areas where ATMs are always congested or scarcity of banks/ATMs are also good locations to set up your business.
People are usually in a rush, and while not everyone likes waiting in line at an ATM, if they see an alternative, they will readily embrace it regardless of the fees.
It’s been suggested that the business does well close to markets and banks. When a bank ATM shows insufficient funds, many customers who need money will come to your place, especially if you handle a substantial quantity of money.
How to Succeed In a POS Business
- • Do not collect high charges – You can charge N300 for a N10,000 transaction, which is 3% on every monetary transaction.
- • Since it requires having a lot of cash at hand, you have to position your business in a more secure place.
- • Ensure you are always available at all costs where your business is positioned. If you abstain from your clients, they will see you as not serious.
- • Except you are well secured, don’t accept a large amount of cash for security reasons.
Conclusion: Pos Business in Nigeria
In Nigeria, the POS business is a great way to make money. It’s very profitable in locations with inadequate ATMs and banks to meet people’s financial needs.
It can be an excellent business to start with and a reliable source of income. The point-of-sale (POS) industry is almost the only one that delivers the bank to the people on the streets – as it makes financial, commercial, and all other banking operations easier for people who live far from the bank.
Reading everything from the beginning to the end is crucial for easy intake and understanding of the topic. Make an effort to build positive relationships with your customers and other business owners in your neighborhood, where customer relations management comes in.
Keep in mind that the POS industry is thriving, and keeping a good customer relationship will help you grow your business. Successful organizations are well-managed, so effective management strategies are essential for business success.