Today a POS business in Nigeria is on almost every street; it is also called the agent banking business, and it is a legal and lucrative way to make money in Nigeria.
POS business started to spread in 2013. Since then, it has become a good way for financial services to reach the unbanked and remote societies so people can make different financial transactions without going to the bank. This has made business operations easy, saved people from time wastage and stress, and helped them save money.
Although many people still doubt the POS business’s profitability, you can invest in it and make it big in no time because the market is large, and the business is always in demand 24/7. So here is a guide that explains how to start a POS business in Nigeria and everything the business entails.
How the POS Business Works
A POS agent is an independent contractor with a POS machine provider such as a fintech company or bank; you will be independent because you are not an employee of the company or bank; you work separately, and how you choose to run your business is not their concern, as long as you meet the standards for using the POS machine.
The services offered by a POS business include bills payment, airtime and data purchases, wire transfers, BVN enrollment, account opening, deposits, and withdrawals. Also, the POS machine can be used in stores and offices for fast and easy payments and transactions.
When you start using the machine, you may be required to pay a certain commission to the POS machine provider, and you will also add your charges to what the client is paying so you can make profits.
Steps to Start a POS Business in Nigeria
Choose a Preferred POS Machine Provider
There are numerous POS machine providers in Nigeria; choosing the best one is very important for your POS business. Some POS machines are faster, cheaper, and easier to use than others, so there are many things to consider when getting one. You can also research and compare different providers to know what each of them offers.
Meet the Requirements
If you have decided on the POS machine provider you want to work with, you should find out their requirements and how to meet them. For example, if it is a bank, you may be required to have an account with them and a certain amount of money deposited.
Every POS machine provider has their requirements; if you can’t meet them, you will not be qualified to get a machine.
Get the POS Machine
Once you find a POS machine provider that meets their requirements, you can go ahead and apply for the machine, and in a short time, you will get it. However, some banks or companies require you to pay specific commissions from each transaction, while others may only ask for a one-time fee.
Also, remember that some POS machine providers may give you some requirements to meet even after getting the machine, and failure to do so may result in the retrieval of the device.
Secure a Good Location
Bustling streets, markets, malls, event centers, offices, and other public places have proven to be the best locations for POS businesses. A good location for a POS business will be a location where there are many people and where people will need cash and financial transactions.
Network speed, security, and competition are also great considerations for a location. First of all, safety is vital to handle cash and secure financial transactions without fear of theft or scammers. Also, the network speed will determine how seamless your services will be; you don’t want to struggle to make simple transfers because there is no good network.
Lastly, do not open a POS business where there are already too many people doing the same business, except you have something different to offer, like a discount or bonus.
Cost of Starting a POS Business in Nigeria
We have discussed the steps to start a POS business in Nigeria, but you may wonder how much it will cost to create one. However, the startup cost for a POS business in Nigeria has no specific amount; rather, it depends on some factors.
This includes location because renting space may be more expensive in some areas; then again, the POS machine provider determines how much you will need since they all have different prices for their machines and commissions. Lastly, it would be best to consider available cash, which can vary according to budget.
However, the cost of starting a POS business in Nigeria will range from N50,000 to N500,000. Therefore, you have to improvise and manage things according to your budget.
A POS business is very lucrative in Nigeria, and you can make it your side hustle or open it in multiple locations so that the business will yield more income.
However, it would help if you made proper inquiries about the business before starting it; hopefully, with the above guide, you can get the important information you need to plan and create your own POS business. You can also read about 7 very lucrative businesses to start with 300k in Nigeria to get more business ideas that can earn you money.