POS Business in Nigeria: Guide on How To Start (2023)
With the modern mobile cash banking business, POS thriving in Nigeria, a lot of people are intrigued in setting a business in this area. This article explains how to start a POS business any where in the country, the requirements, guidelines, cost and subsequently the benefits of venturing into POS business in Nigeria.
The reason most individuals own a POS business which can also be referred to as agent banking business is to reach out to areas on behalf of financial institutions such as banks where ATM and banks are limited. Financial services such as withdrawal and deposit services, paying electricity bills, etc are all made possible with the aid of starting POS business in such remote areas.
Although POS agents are not employed by banks directly, they aid the banks in providing financial services for an agreed commission with the financial institutions. POS business is one of the best ways of making passive income in Nigeria.
What is POS?
Often times, you’ve been hearing about POS for a long time now. Point of service or sale, abbreviated as POS is a banking service that allows local debit cardholders make payment for goods and services mostly in a retail location. This service makes use of a POS machine in doing the transactions.
POS service is a very good automated product because it mitigate the stress and bulk of carrying cash around, and it helps in transacting directly with cash, etc. The service is also fast and reliable as it gives instant notification of payment and transactions. This is seen as customers receive alert whenever they do cash transfer with a POS agent.
POS service is not just only for payments and bank transfers, but it is also customized for bill payment such as airtime (recharge card printing), DSTV, GOTV, School fees, Rent, and Tax payments, etc. You also find POS machines being used to make direct payment in offices, shopping malks, filling stations, pharmacies, small businesses, eateries, etc.
How Profitable is POS Business in Nigeria
This business is a lucrative one to delve into. This is due to increase in the number of constomers who are patronizing the services on a daily basis to carry out their transactions and transfers. Why people are inclined to using this business is that it reduces bank stress. If you have ever gone to ATM post and queue for a long time extending to hours, it should tell you that this business is thriving well in transactions. People now see it as a good substitute to banks cash withdrawal and transfer.
The POS business is a business that have provided jobs to thousands of people especially young entrepreneurs and business people who venture into it. Another advantage of the POS business is that it requires less capital and will swiftly grow if you put all measures in place to start the business. Below are the steps to take in order to set up a successful POS business that will sequel be profit-driven.
Guide on How to Start a POS Business
POS Services, like any other business, involves proper preparation, capital, location and the business environment. If you have been looking for how to establish a POS business or you want to do a mobile ATM cash banking business in Nigeria, then this article will give you the guide to start.
Step 1: Having a Shop
In any enterprise, the business place is very consequential, due to the fact that it gives your business precision and easy recognition. One good thing about this business (POS) is that it doesn’t require large space, a vendor or small place is just enough to start the business in. When locating your POS shop, it’s best to situate it in a business and commercial area, so as to increase patronization and profit.
Step 2: Location
The location is very important in the POS business. You need to go for a business area that will increase in the number of your patronizers which will subsequently increase in your business profit. I prefer it should be an open vendor and should be visible and accessible for customers.
Step 3: Start Up Fund
Before venturing into a POS business, you need to have a considerate capital, which should be about N50,000. This money will cover for the shop, and will be for withdrawal payment and also for miscellaneous such as point of sale purchase.
Step 4: Getting The POS Machine
Of course, you can’t start this business without this infinitesimal machine. There are two ways of getting a POS machine, which is through banks or other financial agencies. The requirements a business or individual must meet before being given the POS machine is that they must have;
- A registered business name
- A sales point (i.e. the business location)
- A passport photograph
- Account number
- Business email address and phone numbers
- And some other essential details.
- Once all this criteria is met, you will be directed to the bank account officer, and your application will start processing within 72 hours from applying.
- The POS machine will be delivered to you under 14 days, and you will be required to sign a POS agreement document with the bank before handing over the device to you.
Cost Of POS Machine in Nigeria
The prices of POS machine varies depending on the agent, company or bank you are buying from and the type of the machine in question. Though there is no specific price for POS, but the price range in Nigeria falls around N45,000, N65,000, N75,000, to as high as N200,000 depending on the specification of the machine. Such variation may be like having 2G, 3G and 4G, so the higher the price, the more compactible it is and better the service.
Where to Get POS Machines
POS machines are only issued by banks and other financial institutions. Below are list of some prominent banks which offers POS services, to get the machines; First Bank, Access Bank, Ecobank, Zenith Bank, Skye Bank, Fidelity Diamond bank etc.
It is important to note that Banks charge you certain percentage for every transaction you make. Hence, POS machines offered by banks are issued out for free in line with the bank’s terms & condition and their mode of operation. For instance, some banks can only give you when your customer base is from 1,000 and above, and other condition may be if you can sale your products up to one million Naira a day.
Where to Setup a POS Business
These are good places where you can establish your POS business in Nigeria;
- Remote Rural Communities – where there are an iota of banks and financial institutions.
- Near Schools – University and college campuses will be a good advantage in establishing your POS outlet, because of lot of school transaction students engage.
- Places Where ATM are always crowded or in places where there are shortages of banks/ATM post.
- POS business thrives well close to markets and banks because of the much transactions carried out in these places.
- In populous business premises like supermarkets, malls and large vendors.
Benefits of POS business in Nigeria
POS business have a lot of positive advantages which it gives to the individual business and the patronisers as a whole, they include:
- Creation of jobs.
- Helping in Bank decongestion by creating a medium for transfers.
- Opening business opportunities for entrepreneurs.
- Reducing bank costs and extending banking services to a wider range for customers.
- POS services also help to increased account acquisition for the banks.
This and many more are the benefits of POS to businesses and also banks.
POS business is a new modern way of doing cash transactions, and it has become a very lucrative business option for entrepreneurs to opt to. This article covered how to start a POS business in Nigeria, the costs and subsequently the benefits.