POS business in Nigeria is currently one of the hottest businesses to start for the average Nigerian. I
t is slowly taking over ATMs because of the ease and convenience it provides consumers.
A POS business or mobile money agent makes cash available to people in exchange for a commission or fee through a POS machine.
Because of the scarcity of Automated Teller Machines (ATMs) and the long queues people experience at ATMs.
You can now find someone running a POS business everywhere you turn in Nigeria.
That’s why we created this guide on how to start a POS business in Nigeria.
In this guide, we will take a thorough look into the POS business in Nigeria.
Its common challenges and disadvantages, the cost of starting a POS business in Nigeria, and how profitable and lucrative it can be.
And if it is something you should go into the POS machine you can use and the Agent networks you can join.
How to Start a POS Business in Nigeria (Requirements)
Here are the steps you need to take to become a mobile money agent or start a POS business in Nigeria:
1. Determine the Cost of Starting a POS business
The cost of starting a POS business in Nigeria can be different from person to person. Because of the different locations, people stay in.
The amount to rent a shop or space to start this business in Lagos will be different from a place like Maiduguri.
You’ll also need to know which bank or POS company you’re going to sign up for to become a POS agent.
Some people use 2 to 3 different POS terminals at the same time. So that’s an option to consider.
Do they offer free POS machines or do you have to pay? Do their requirements entail any expense?
You also have to consider how your shop will be.
Do you need a safe? How are you going to secure the shop?
These are some of the things to consider to arrive at the cost of starting this business.
Related: Best Business Ideas in Nigeria for You
2. Find a Suitable Location
Since this will be a physical business that will require lots of leg traffic it’s important to get very suitable.
A suitable location will be a place that is densely populated.
It should be a place where a lot of people stay and where there isn’t easy access to banks or ATMs.
3. Raise Your Capital
Since you determined your cost for starting the business, you know how much you need to start.
All that you need is to raise the capital and you’re mostly on your way to becoming a POS agent.
Below you’ll find out how much it costs to start a POS business in Nigeria
Related: List of POS Machine Prices in Nigeria
4. Apply to Become a POS Agent
Depending on the bank or financial institution, applying to become a POS agent or for a POS machine might be an outright purchase, lease, or even for free.
Determine which of them is suitable for you based on their requirements, commissions, and charges.
You can apply for a POS machine online or go to the bank or company’s office. But this process can take from 2 weeks to a month for everything to be set and for you to start earning as a POS agent.
How to Calculate Profit in POS Business
As a POS agent, you can calculate your profit based on the transaction charges. The charges for a deposit transaction are different from the charges for a withdrawal transaction or any other payment and billing transaction.
You can calculate your profit from your POS agent business by deducting your POS provider charges and commission from the money you collect from each withdrawal or deposit transaction done with your POS.
So if you charge N200 Naira for a withdrawal transaction of N20,000 Naira and your POS provider charges a N100 Naira flat fee.
Then your profit is N100 for that transaction done with your POS.
To calculate your real profit for your POS business in Nigeria you have to deduct all your expenses from the total money you’re making from the business. Expenses included logistics, rent, power, staff (if any), and so on.
What is POS Business in Nigeria?
A POS (point of sale) machine was created to make businesses, merchants and retailers collect payment for goods or services without the need for cash.
But since then POS machines aka terminals are now being used by banks in Nigeria and fintechs (financial technology companies) to improve financial inclusion by bringing financial services to the unbanked and underbanked population in Nigeria.
So essentially, you don’t need to visit a bank to perform most financial transactions. You can do these transactions at a POS center.
So people who did not have access to banks or banking services can now enjoy these services as long as there is a POS business close to them. Especially for people in remote and rural communities.
This is why the POS business is gaining popularity in underdeveloped and developing nations.
Related: Lucrative Business in Nigeria to Start
The people who start a POS business in Nigeria are commonly referred to as POS agents.
POS agents get money from the commissions when they carry out any authorized financial transactions on behalf of consumers/customers.
A POS business in Nigeria isn’t just for making payments and transfers. You can use it for airtime recharge, DSTV & GOTV payments, and even for paying taxes.
Services of a POS Business or Mobile Money Agent in Nigeria
A POS agent business or a Mobile Money Agent in Nigeria can offer the following services to people around where their business is located.
- Open new bank accounts
- Deposit & Withdraw Money to and from any Bank
- Send money
- Make Bill payments like electricity, Cable TV, airtime, and tax payments.
- Enroll for BVN (Bank Verification Number).
Checkout: The Lucrative Untapped Business in Nigeria
Is POS Business in Nigeria Profitable?
On average, starting a POS business can be profitable and lucrative. Especially if you already have another business with a location that you are currently running.
As it reduces the amount of capital you need to start this business.
This is because more and more people are patronizing POS centers every day to carry out their financial transactions and stay away from the stress that banks give.
POS business is also profitable in Nigeria because a lot of remote places have no bank branches, so POS agents have become the de facto banks.
And a POS agent or business doesn’t have to do any marketing as they’re in the public eye and customers will always come to them for the ease they provide.
Checkout: Cheapest Businesses to Start in Nigeria
POS agents have now become a true alternative to going to the bank, especially for cash withdrawals and transfers.
POS business in Nigeria doesn’t require so much capital to start and you can start making money the day you launch the business.
Just make sure you have a very good location.
On average a POS agent in Nigeria can make N7,000 to N10,000 daily depending on their location and how they’ve built trust with their customers especially those around them.
How do You Make Money from a POS Business in Nigeria?
You make money from the commission you get from every customer who comes to use your POS machine. Say if a customer wants to withdraw N5,000.
You’ll charge N100 for the transaction and share it with your POS Provider. You can take N60 as your commission while the bank or the company takes N40.
Also See: How to Start a Successful Music Career in Nigeria
How Much Does it Cost to Start a POS Business in Nigeria?
There is no fixed cost for starting a POS business in Nigeria. The cost of starting a POS business can depend on whether you secured a location (shop) or not.
Then it also depends on if you’re getting a POS machine for free or not.
The main cost that you’ll require for starting a POS business in Nigeria is the cash at hand you’ll need to make withdrawals possible. This can range from ₦250,000 to ₦150,000.
Getting a new POS machine/terminal from some banks or fintech companies in Nigeria can cost between N85,000 and N100,000 only. Some also offer free POS machines, but you must meet their requirements.
Checkout: Cheapest POS Charges in NIgeria
How Much is a POS Machine in Nigeria Cost Of POS Machine in Nigeria?
The cost of a POS machine in Nigeria depends on the bank or company you want to be an agent of or you’re buying from.
There is no fixed price for POS terminals in Nigeria.
The prices for POS machines in Nigeria can range from N45,000 to N65,000 to N75,000 and can get as high as N200,000 depending on the specifications of the POS machine.
Different POS terminals have different specs like 2G, 3G, and 4G as well as other types of features.
Benefits of POS business in Nigeria
- The benefits of POS business in Nigeria to both the business owner and customers are:
- It can be another good stream of income for small business owners.
- Provides ease and convenience for people as they don’t have to go to the bank to make cash transactions.
- It promotes financial inclusion in the country.
- It reduces exposure to theft, as people don’t have to carry so much cash around.
- It increases sales for merchants as they can cater to both cash and card-carrying customers.
Disadvantages of POS Business in Nigeria
The disadvantages and challenges of owning a POS business in Nigeria are:
- Robbery attacks. Because of the nature of this business (deals with cash), it can attract robbers and criminals to the enterprise. Since you cannot hire a security guard for this business. You’ll need to be very security cautious and take precautions with how you move and hold money.
- In this business, you can encounter issues with Banking Networks. So it’s important that whatever POS agent service you decide to work with, they have reliable network services.
- Some people combat this by having up to three different POS machines. Because of the erratic power supply in the country, its important to make sure your POS machines) are always charged. A small generator might not be a bad idea.
- Lack of enforcement in Agency banking: Because of the lucrativeness of the POS business, a lot of people are pouring into it and there’s a lack of regulation in this industry. In some places, some POS shops are so close to each other. No regulation guides the spacing of the shops. And there is no fixed charge for POS agents per se, so charges can differ from agent to agent.
List of POS Charges in Nigeria
Here is a list of companies and banks that you can become a POS agent of and their POS charges in Nigeria.
Please note that these charges might not be what you see when you visit your prefered mobile money agent service.
1. GTB POS Charges
GTbank charges a fee of 0.75% for each payment or service made with the POS.
2. OPay POS Charges
Opay POS charges can go as low as 0.5% per transaction (if you’re using the mini POS). However, note that the Initial charge per transaction is 0.6% and then 0.5% after upgrading to Preferred Opay Merchant status.
3. Palmpay POS Charges
Palmpay POS withdrawal charge is 0.5% on withdrawal transactions. For deposits, Palpay charges a fixed fee of N10 naira regardless of the amount being deposited.
4. BAXI POS Charges
The Baxi POS charges are:
- Cash Transactions (0-20,000) – 0.55%
- Cash Transactions (20,001-100,000) – N100 flat
- Cash Deposit – N30 flat
- MTN Data Bundle Recharge – 1.60%
- Airtel Data Bundle Recharge – 1.76%
- Glo Data Bundle Recharge – 2.80%
- Glo Prepaid Recharge – 2.80%
- 9Mobile Data Bundle Recharge – 2.80%
- IKEDC Token Vending – 1.20%
- IKEDC Bill Payment – 1.20%
- EKEDC Prepaid – 0.8%
- EKEDC Postpaid – 2.00%
- AEDC Prepaid – 0.96%
- AEDC Postpaid – 0.96%
- Gotv (Regular Agent) – 1.40%
- Gotv (SabiMen Agent) – 1.20%
- Dstv (Regular Agent) -1.40%
- Dstv (Sabimen Agent) -1.20%
- Golden Chance Lotto (5/90) – 20%
5. Payforce POS Charges
- Deposit: N25
- Withdrawals: (0- ₦5000) = N30, (₦5,001- ₦16,500) = 0.6%, (₦16,501- ₦100,000) = N110, (₦100,001 and above) = 0.11%
6. Kudi POS Charges
- Withdrawal: (below ₦4500) = ₦25, (₦4,501- ₦25k): = 0.6%, (Above ₦25k) = ₦150
- Transfer: ₦45
Paycentre POS Charges
- Withdrawals: (0 to ₦10,000) = 0.55%, (N10,001 to ₦15,000) = N65, (₦15,001 to ₦20,000) = ₦75, (₦20,000 Above) = ₦80.
- For transfers: (0 – ₦5,000) = ₦10.5, (₦5,001-₦50,000) = ₦26.25 , (₦50,000 and above)=₦50.00
Moniepoint POS Charges
- Withdrawal: 0.5% (₦1000 – ₦19900), 100 Naira Flat for (₦20K – ₦1,000, 000)
- Deposit: ₦12 Naira
Kashzoo POS Charges
- Withdrawals: ₦1,000 to ₦5,000 are charged at ₦30, ₦5,001 to ₦10,000 are charged at ₦45, ₦10,001 to ₦20,000 are charged at ₦76, ₦20,001 to ₦40,000 are charged at ₦85, ₦40,001 to ₦100,000 are charged at ₦110, ₦100,001 to ₦200,000 are charged at ₦150
Kolomoni POS Charges
- 0.5% for withdrawal from ₦1000 – ₦19900,
- ₦30 for Deposits 100 Naira flat from 2000 Naira and above.
Where to Get POS Machines?
You can get POS machines only from banks and other financial institutions in Nigeria.
Some of the popular banks and financial institutions to get a POS machine from in Nigeria are; GTBank. First Bank, Access Bank, UBA, Zenith Bank, OPAy, Baxi, Monie point, Kudi and Bankly.
Which POS Agent is the Best in Nigeria?
- OPay POS
- GTB POS
- Kudi POS (Nomba POS)
- Palmpay POS
- Baxi POS
- Moniepoint POS
- Pay force
- Firstmonie POS
- Bankly
- Paga
- Zenith Bank mobile money agent
- Access Bank CLOSA agent
- Quickteller Paypoint
- Ecobank Xpress point
- UBA POS
If you intend to become a POS Agent in Nigeria, some of the best companies to consider based on cost and commission rates are:
See: How to Register a Business Name in Nigeria Successfully
Which Bank is Best for POS Business in Nigeria
The Best banks for POS business in Nigeria are GTBAnk, Wema Bank, First bank, Access bank and UBA.
Leave a Reply