How To Start A POS (Point of sales) Business In Nigeria

POS business was launched in Nigeria in 2013, culminating in the Central Bank of Nigeria (CBN) introduction of the agent banking system. This, in turn, made financial services in Nigeria have a wider reach, especially in the unbanked areas of the country.

We can not underemphasize one significant benefit of the POS business, which is the elimination of long queues in banks. The proximity of POS stores also alleviates stress and eliminates the need for transit to the bank for even small transactions. The business benefits people who live in remote and rural locations where banks are far from their homes.

How Does the POS Business Work?

A POS agent works for a POS service provider, such as a bank or a financial technology firm. The agent keeps cash on hand for transactions resulting in a bank fee.

The POS agent provides customers with various transactions, such as withdrawals, transfers, bill payments, or even opening a personal bank account. A POS device allows the agent to complete all cash transactions using the customer’s debit card. The agent enters the transaction type and amount into the POS terminal. The debit card and the customer’s four-digit pin are then entered sequentially.

The GPRS network communicates with the bank’s server to approve the transaction, which, if successful, generates receipts for the customer.

What are the Services Offered by the POS Business?

POS businesses offer a wide range of services to meet the varying needs of their customers, and these are:

• Withdrawal of funds from a bank account
• Opening a bank account
• Funds deposit
• Bills payment such as electricity, TV subscription, airtime recharge, etc
• Funds transfer
• BVN enrolment

How Do the POS Agents Make Money From POS Business?

POS agents can earn from N5,000 to N20,000 daily, occasionally. This largely depends on the location of the business. For example, there is a likelihood that POS businesses located along significant roads or streets in urban centers will make more money than those in the hinterlands.

Customers’ transactions, from withdrawals to airtime purchases, generate income for POS agents. Occasionally, the POS service provider also pays a commission to the agents.

When a customer walks in to perform a transaction, such as an N5,000 withdrawal, the agent typically collects a charge fee of N100, of which the POS provider takes a percentage, and the remainder goes to the agent’s pocket.

Every transaction a POS agent performs for a customer is subject to a service charge, which the consumer must pay. The payment of this fee is where a portion of the POS agent’s income comes from.

As previously stated, the bank or POS supplier pays the agent a daily or weekly fee. This fee is determined by the number of transactions performed by the agent utilizing their wallet or service.

How to Become a POS Agent

Financial institutions authorize POS agents to provide consumer mobile money services, such as withdrawals, transfers, and bill payments. While there are a number of financial institutions that provide POS to merchants, only few are known. Here are some of the popular POS Operators including banks and fintech companies in Nigeria:

S/N	POS OPERATORS
1.	Zenith bank Agent Banking
2.	First Bank of Nigeria
3.	Access Bank
4.	Opay Mobile Bank
5.	Monie Point POS
6.	Wema Bank
7.	GTBank
8.	Kudi Bank
9.	Ecobank
10.	Quickteller
11.	UBA Monie
12.	Paga
13.	Access Closa
14.	Heritage Bank CornerShop Agent Banking
15.	Keyserv Agency Banking Service
16.	Stanbic IBTC @ease Agency Banking Service
17.	Ecobank Xpress Point
18.	FCMB Agent Banking Services
19.	UnionDirect
20.	SurePadi Agency Banking
21.	GT Express
22.	Firstmonie
23.	Quickteller Paypoint
24.	Baxi Box
25.	PalmPay
26.	Nomba (formerly Kudi)
27.	Bankly
28.	Moniepoint

 

Note that you must have opened a bank account with the financial institution you wish to become a merchant of, and have banked with them for a while before they can trust you enough to be their merchant. Your transaction history has a way of increasing your eligibility.

What to Consider Before Starting a POS Business

1. Location

The amount of money required to rent a store, kiosk, or even an umbrella stand will be determined by the location of your POS business. It is best to make inquiries on the cost of setting up your POS business in a particular location.

2. POS Device

POS devices cost between N30,000 and N100,000. But this cost depends on the bank or fintech firm you intend to use as your POS provider.

3. Available Cash

To be able to carry out everyday transactions, you require a substantial sum of money. It can range, at the very least, from N100,000 to N300,000. As such, you can be assured of meeting the financial needs of your customers with this amount of money.

Requirements for Starting a POS Business

1. Capital

It would help if you had a starting capital to enable you to start this business because you will need money to get a POS device, contact a store, and available cash to give to your customers.

2. Location

You need to do a survey of your preferred location to know where will be favorable for your POS business to thrive. Examples of these places are markets, parks, and other densely-populated areas.

3. Official Requirements

The Central Bank of Nigeria has established specific conditions for POS agents to meet before any banking institution licenses them. You can learn more about the requirements by visiting the bank of your choice or contacting their customer service. The CBN allows POS agents to work for multiple POS service providers.

Some of the required documents are:

• Valid means of identification (international passport, driver’s license, voter’s card, national ID card)
• Bank Verification Number (BVN)
• Passport photographs
• Current account references
• CAC certificate
• Evidence of startup capital with a minimum of N50,000
• Tax Identification Number (TIN)

How to Setup a POS Business with Opay

An Opay POS agent is a merchant enrolled with Opay, also known as Paycom, a legal mobile money platform. Opay is a rapidly growing Fintech startup that has leveraged its POS agency to provide possibilities for many Nigerians.

Services Offered By Opay POS Business

• Money withdrawal
• Money transfers
• Buy airtime at a low cost, mainly when you use the Opay app.
• Make a cable TV subscription.
• Pay utility bills

What is the Cost of Becoming an Opay POS Agent?

You don’t have to spend anything to sign up as an Opay agent. To register as an agent, download the Opay app.

Requirements to Start an Opay POS Business

• Valid means of identification
• Passport photograph
• Bank Verification Number (BVN)
• Utility bills not older than three months

How to Become an Opay POS Agent in Nigeria

• Visit the Google play or iOS store to download the Opay app.
• Send an email to [email protected] requesting an OPay merchant registration form.
• Or log into the Opay app and choose the Merchant application icon.
• Enter your correct details.
• Upload all the required documents.
• Submit your application form for review.

An Opay staff will contact you upon the successful review of your application.

How Much is Opay POS?

For agents who have established a solid transaction history with Opay, the Opay POS is free. However, they must have N20,000 available in their wallets as a caution charge. The caution fee will go into effect after the POS terminal is approved.

New Opay agents can purchase an Opay POS machine if they are impatient to start accumulating their transaction history.

The prices of the POS device are as follows:

• Opay Smart POS – N50,000
• Opay Traditional POS –N35,000
• Opay Min POS – N8,500

What is the Fee of Opay POS?

Opay charges 5% for each daily transaction, and the agent keeps the remaining 5% or more as income, depending on how much the agent charges each customer.

How To Start POS Business With Monie Point

Moniepoint is a reputable and fast-paced mobile money network where you can work as a mobile money agent and earn money by offering financial services to the general public. For its agents to successfully operate a POS firm, Moniepoint provides them with reasonable fees and commissions.

Services Offered By Monie Point POS

• Cash withdrawal
• Money Transfer
• Bills payment
• Instant settlement

Cost to Become a Monie Point POS Agent?

Monie Point does not charge for using its service, so it is free for every interested merchant.

Requirements For Starting A Monie Point POS Business

• Bank Verification Number (BVN)
• Utility bills not older than three months
• Valid proof of identification (driver’s license, voter’s card, national ID card)
• Valid bank account number
• CAC certificate

How To Become A Monie Point POS Agent

You can become an agent by visiting the official Moniepoint website at https://moniepoint.com/. The website will take you to a form that will be used to contact you. Confirm your email address and phone number so a cluster manager can reach you within 48 hours.

The agent will tell you what you need to do next to confirm your Moniepoint agent account. Upon the successful confirmation of your application, you can log in to your Moniepoint dashboard to manage your account.

How Much Is Monie Point POS?

The Moniepoint POS machine costs N25,000, which is an amount that is less than what other POS machines cost. But instead of waiting a long period to receive the POS machine for free, you may purchase one.

What are the fees for Monie Point POS?

The prices for Moniepoint POS transactions are among the lowest. In contrast to other POS services, they base their fees on the volume of transactions you carry out rather than the bank. For all banks in Nigeria, the fixed monthly fee for Moniepoint is N20.

In addition, Moniepoint does not charge additional bank fees, unlike many other POS service providers, for withdrawals up to N4,000; nonetheless, the rate grows as the amount withdrawn increases.

Advantages Of POS Business in Nigeria

1. Side Hustle

Most people require a side business to support their employment or other enterprises due to the rising cost of living. This is the ideal chance for POS businesses. You could even hire someone to run the store while keeping an eye on how many transactions are made using your wallet.

2. Huge Customer Traffic

Customers are necessary for a business to succeed, and there are always customers for the POS business. People need to transact all day long, which increases the agent’s revenue.

3. Cheap and Easy to Start

Everyone is aware of how expensive it is to pay the yearly store rent in the majority of Nigerian cities. But for POS businesses, a complex structure is not necessary—at least not at first. Most POS businesses operate out of a straightforward wooden kiosk that serves as their office.

Disadvantages of POS Business in Nigeria

1. Poor Network

Being the victim of a poor network when processing a transaction is never fun; aside from causing the customer to wait longer, it also results in unauthorized bank debits, even though the money never made it to the agent’s wallet. Most POS agents use various POS devices due to this widespread issue.

Furthermore, a thorough study is required to determine whether her POS service provider has a solid network.

2. Insecurity

Large sums of money must be moved from the bank to your place of business to handle POS enterprises. Criminals may target POS agents and their businesses for robbery attacks. It’s crucial to always be on guard and security-conscious.

3. Fraud

Some unscrupulous characters use POS machines to commit fraud; you will recognize a scam when you come across one; you might need a few pointers from people in the POS business.

Conclusion

An alternative source of income besides your current business or job is a POS business because it provides you with a stream of opportunities. However, it is important to research factors like location, POS service providers, and whatnot before you delve into the business.