This is a detailed guide on how to start a POS business in Nigeria, read to the end to know how to start a POS business in Nigeria.
There are many profitable business opportunities you can venture into in Nigeria, and the POS business is one of the businesses.
POS business is a very profitable business to start in Nigeria, and it is very easy to start it as well.
If you want to start a POS business in Nigeria, this article will help you know how to start a POS business in Nigeria, the cost of starting a POS business in Nigeria, and how to get a POS machine for free in Nigeria.
About POS Business In Nigeria
Point of Sale or Point of Purchase (POS) is a system that allows customers to make payments for goods and services with their debit cards in retail shops, offices, supermarkets, fuel stations, pharmacies, eateries, etc.
The idea of POS machines in retail outlets is that customers can pay for goods and services without necessarily carrying cash around.
In Nigeria, POS usage has gone beyond just making payments for goods and services in retail outlets, it is now used to make transfers and withdrawals of funds, sell airtimes and pay bills such as GOTV, DSTV, Startimes, PHCN, and other utility bills.
However, this aspect of POS usage is referred to as agent banking in Nigeria.
The agent banking system started in 2013 in Nigeria, after its guidelines and operations were released by the Central Bank of Nigeria.
The emergence of agent banking brings about another business opportunity in Nigeria which is the POS business.
With this business, people can easily go to withdraw and transfer money using their debit cards, without necessarily going to the ATM stand.
The POS business, no matter how popular it is becoming today, is still one of the best-untapped streams of income in Nigeria, especially in rural areas.
Many commercial banks have come to appreciate and sponsor POS agents to make their services available to remote areas, and reach a larger number of people.
One way they sponsor and support the POS business in Nigeria is by providing the POS agents with POS machines, mobile phones, and other relevant equipment that will make it easy and comfortable for these agents to carry out minor banking transactions.
If you are looking for a business to start without much capital, or you already have an existing business and wish to diversify, starting a POS business is not a bad idea for you.
What You Need To Start A POS Business In Nigeria
The amount you need to start a POS business in Nigeria may vary, depending on two major factors including your location and how you intend to get the POS machine.
Location is one of the factors that will determine the amount of money you will need to start a POS business in Nigeria.
For instance, you definitely will need a shop or a small kiosk where you will carry out the business.
If you are in a rural area, or in a location where things are quite cheap, it will not cost you a lot of money to rent a place for your POS business.
Whether you intend to get your own place, or partner with someone who already has a shop, and be giving him a certain monthly fee for using his shop.
Whichever you prefer, it will cost less, compared to someone in an urban area, or a place where the cost of living is relatively high.
2. POS Machine
Getting the POS machine is another factor that will affect the amount you will be needing to start your POS business.
For instance, if you intend to get the POS machine from the banks, you may get it for free.
I mean, you are likely not going to pay anything for it, however, there might be some terms and conditions attached to it.
However, if you intend to buy the POS machine from other companies or agencies, you may get it for an affordable rate of ₦40,00 to ₦80,000, depending on the type.
Whichever means you intend to get the POS machine will ultimately depend on you.
3. Available Cash
You need a substantial amount of money to enable you to carry out the daily transactions. It can be from ₦100,000 to ₦300,000, at a minimum. With this sum of money, you can satisfy your customers’ financial needs.
That is pretty much the breakdown of how much you can use to start a POS business in Nigeria.
In summary, the cost of starting a POS business in Nigeria is between ₦250,000 to ₦500,000.
Requirements For Starting A POS Business In Nigeria
As I mentioned earlier, the POS business is very profitable in Nigeria, especially one that is set up in a very remote area, or a location very far from banks.
However, before you can start a POS business in Nigeria, there are certain requirements you must meet and they include:
1. Be registered with CAC
Before you can operate any business in Nigeria legally, such business must have been registered with the Corporate Affairs Commission (CAC).
Hence, it is essential you register your CAC business with CAC if you must operate legally in Nigeria.
As a matter of fact, the requirement stipulates that you must be registered with CAC as any of the below entities.
- Limited Liability Company
- Sole Proprietorship
- Cooperative Societies
- Public Entities
- Trusts or any other entity aside from faith-based or NGOs.
Truth is, registering a business with CAC is very easy, and comes with a lot of benefits as you will come to learn.
As a matter of fact, you can now register your business with the Corporate Affairs Commission, CAC right from the comfort of your home (I did mine myself online).
If you wish to get started with registering your business with CAC, you might find our step-by-step guide on how to register a business with CAC very helpful.
2. Have A Store Or Office
I hope you can understand why having a shop is a requirement before you can start a POS business in Nigeria.
For those who may not, let me help you understand. Operating a POS business requires you to have a shop or an office, as you can not just stand on the road carrying out certain transactions.
I understand some people might not have much cash to go and rent a shop or an office. However, there is a way around it.
Most POS agents as you may have also noticed operate in a kiosk, and in other people’s shops.
All you need to do is have an agreement with a shop owner in a good location, that you will be paying him a certain amount of money every month, then he can permit you to be doing your POS business from his shop.
3. Have A Start-up Capital
You also need startup capital to venture into the POS business. Startup capital is one of the crucial things you need to start up a POS business.
4. Have The Official Documents
The Central Bank of Nigeria has set some requirements that POS agents must meet before they are authorized to start a POS business.
You can get details of the requirements by going to the bank you want to sign up as an agent or contacting their customer care.
However, below are some of the documents you need to have before applying for a POS machine.
1. Valid means of identification like National ID Card, Voter’s ID Card, etc.
2. Passport photographs
3. Bank Verification Number (BVN)
4. Current Account references
5. Evidence of business registration (CAC Certificate)
6. Start-up funds/ capital minimum of NGN50,000
7. Tax Identification Number (TIN)
When you have all the stated requirements, the bank will approve your application, and give you a POS machine free or attached with a cautionary fee, so you can begin your POS business.
5. Register As A POS Agent
Before becoming a POS agent, you must choose a POS service company. There are many of these in Nigeria, and below are some of the popular ones you can register with.
- First bank
- Wema Bank
- Opay mobile bank
- Bankly POS
- Monie Point POS
- Kudi bank
- Zenith bank
- Access bank
How To Start A POS Business In Nigeria
Below is a step-by-step guide on how to start a POS business with some of the popular POS service companies and banks.
How To Start A POS Business With The First Bank
It is very easy to start a POS business with the Firstbank of Nigeria as long as you meet all the requirements.
However, the requirements for starting a First Bank POS business include:
1. You must have an existing business.
2. You must have an accessible location.
3. You must have a valid ID card such as a voter’s card, national ID card, driver’s license, or international passport.
4. You must have a Bank Verification Number (BVN).
5. You must have a Utility/Electricity bill.
6. Corporate bodies must have their business registration documents.
7. You must Engage in commercial activities for at least twelve months
8. You must have a minimum capital of NGN50,000.
9. You must have a functional Firstbank account for at least one year
However, below is a step-by-step guide on how to become a Firstbank POS agent or a Firstmonie agent.
1. Go to the FirstMonie agent banking website, there you will find a FirstMonie agent onboarding form, which you will fill out and agree to the terms and conditions of their services.
2. Click on the “Send” button to submit your request to Firstbank.
3. If you want faster processing of your request, you can visit the nearest Firstbank branch to check on the status of your POS agent request. Ensure you take along with you the complete list of the required documents.
However, the duration of getting a Firstbank POS is between two to four weeks, and to get a Firstbank POS machine, you must deposit a sum of NGN50,000 into your Firstmonie wallet or agent account.
How To Start A POS Business With Wema Bank
Wema bank does require potential agents to pay to become an agent, you only need to have the following Requirements for starting a Wema POS business.
1. A Wema bank savings account
2. An android phone with data
3. Startup funds/capital
4. Own a business with a physical business location
5. Valid means of identification
6. Passport photographs
7. Bank Verification Number
8. Evidence of business registration (CAC Certificate
However, to become a Wema bank agent, follow the step-by-step guide below.
1. Go to the nearest Wema bank branch.
2. Get the Wema POS agent registration form.
3. Fill out the form.
4. The bank will contact you if they approve your application.
Additionally, Wema Bank has no cautionary fee for their agents, but you need to have used your bank account for at least one to six months.
How To Start A POS Business With Opay POS
Opay is one of the Fintech companies that has created job opportunities for many Nigerians.
To become an Opay agent, all you need to do is to download the Opay app and sign up to become an agent.
However, the requirements for starting an Opay POS business are stated below.
1. Bank Verification Number (BVN)
2. Utility bills not older than three months
3. Valid means of identification
4. Passport photographs
Furthermore, below is a step-by-step guide on how to become an OPay POS Agent
1. Visit the play store to download the Opay app
2. Email [email protected] requesting an OPay merchant registration form or log into the Opay app and choose the Merchant application icon.
3. Fill in your correct details
4. Upload all the required documents
5. Submit your application form for review
Additionally, the Opay POS is free for agents who have a good transaction record with Opay, but they must have a caution fee of NGN20,000 available in their wallets.
How To Start A POS Business With Monie Point POS
Moniepoint is a mobile money medium where you can make money as a mobile money agent by carrying out banking services to people.
However, you do not need to pay any money to become a Monie point POS agent especially if you have all the requirements below.
1. A verified identity card such as a driver’s license, Voters’ card, International Passport, or National ID Card
2. Utility Bill (PHCN Bill)
3. Business License or CAC certificate (For Registered businesses only)
4. Valid Bank Verification Number
5. Valid bank account number
However, you can visit the official Moniepoint website to learn how to become an agent.
How To Start A POS Business With Kudi POS
Becoming a Kudi POS Agent is free, all you need to do is to download the app and sign up by making use of your contact details and connecting the app to your bank account.
However, below is the step-by-step guide on how to become a Kudi POS agent.
1. Download the Kudi app from the app store.
2. Open an account with Kudi by signing up with your phone number.
3. Connect the Kudi app to your functional bank account.
4. Start transactions after funding your e-wallet.
However, you need to constantly use the Kudi platform for two weeks, so you can be eligible for a free POS.
How To Start A POS Business With GTB POS
GTBank POS agents are a merchant that delivers financial services to people under the GTBank POS service.
Becoming a GTBank POS agent is free but you need to have the requirements below.
1. A functional Guarantee Bank Trust Account
2. A valid means of identification such as a Voters Card, National Identity Card, Drivers License, or International passport
3. An existing business location.
4. Residential address proof like Utility /PHCN bill.
POS Services To Render
When everything is set, below are some of the services you can render with your POS machine and collect a commission.
- Cash deposit and withdrawal
- Balance inquiry
- Money transfer services
- Bill payment (taxes, utilities, tenement rates, subscriptions, e.t.c)
- Mini statement generation and issuance
- Cash disbursement and cash repayment of loans
- Agent mobile payments/banking services
5 Tips To Succeed In POS Business
To succeed in your POS business, below are five tips I believe will be very helpful to you.
1. Do not charge a high fee for transactions. For instance, you can charge ₦100 for transactions of ₦1,000 to ₦5,000; then ₦200 for transactions of ₦6,000 to ₦10,000 Naira, etc.
2. Do not set up your business where hoodlums operate a lot, to avoid losing your money to them.
3. If you must employ someone to manage it for you, ensure is someone you know very well, and trust, to avoid stories that touch.
4. Always be present at all costs. If you are not always available, people will not take you seriously.
5. If you accept transfers, always confirm the money in your account before giving out funds unless it’s someone you know too well because scammers have found a way to fake bank alerts these days.
That is all on how to start a POS business in Nigeria, I hope it helps you start yours.