Gradually it is becoming apparent that it is becoming apparent that the POS business has been becoming extremely profitable in Nigeria. Everybody is earning profits from it and you can too. In this article you’ll discover how to set up your own POS enterprise in Nigeria.
Additionally, you will learn about the necessary requirements and which banks to work with for a POS business.
Table of Contents
What exactly is an POS business and how does it function?
This Point-of-Sale (POS) business began with Nigeria in 2013, when it was the time that Central Bank of Nigeria (CBN) introduced the agent banking system.
A POS agent is a person who manages and executes transactions using an POS company. Service providers include Microfinance banks, banks and Fintech businesses.
This is how the POS business operates. The agent provides a variety of services for customers to utilize. This includes withdrawals and money transfer, bill payment and other.
In addition to other financial functions among other financial purposes, in addition to other financial functions, a POS device permits an agent to handle transactions with the debit card used by the customer. The only thing the agent has to do is choose the type of transaction for the POS terminal, and then enter the amount.
The customer inserts his/her debit card, and then enter the 4-digit PIN. This POS network will then connect to the ATM account to the server of the bank and complete the transaction. If the transaction is successful, a receipt will be issued to the customer and agent.
Are it possible to make the POS operation profitable Nigeria?
Yes it is. And here’s the reason. A majority of Nigerian banks have branches only in the most crowded commercial areas in each town. In the event that your town’s vast, there may have only one branch.
The result is that those living in areas far from the city will have to use a bicycle or bus to reach the bank and walk or take another mode of transport to return to their home.
Many Nigerians have this problem each day Everyday, and POS agents are there to help the burden.
Which bank is ideal for an POS company in Nigeria?
The majority of commercial banks of Nigeria offer POS services for interested agents. Here are some banks that are preferred by the majority of POS agents.
- First Bank
- Wema Bank
- Opay mobile bank
- Bankly POS
- Monie Point POS
- Kudi bank
- Zenith bank
- Access to bank
You must be a customer of an institution before you can become an POS agent for that bank. You will need to open an account with the bank and make regular transactions.
The requirements for starting an POS company in Nigeria
1. Good place to be located.
2. A POS device
3. Start capital
4. Official requirements
- Recently snapped Passport photos
- Bank Verification Number (BVN)
- References to your account
- CAC Certificate
- Tax Identification Number (TIN)
How to begin an POS company in Nigeria
Let’s move on to the most important issue of how you can start with your POS company in Nigeria. We’ve outlined the entire process in six steps.
1. Find a great spot
The search for and the securing of a suitable place to set up shop is crucial for any POS company in Nigeria. If you’re in a favorable place, huge revenue and profits are certain.
How do you find a suitable spot for the POS company
A great location is one that is very crowded We all are aware of that. But there are some points to be considered.
Have you ever been to the POS outlet only to be told by the employee that they said there was no network? It happens a lot of times.
If you run your POS company in an area that is connected to a solid infrastructure or network you’ll be able to complete your transactions as efficiently as you can.
However the location with inadequate network could cause you lots of problems and, in the majority of cases, aren’t anticipated. If a potential customer decides to come into your store and you do not have a network, that customer might not return (except when you’re the sole POS agent in the location).
Operating a POS company means you’ll be managing lots of cash. Everybody knows this and this makes the POS establishment one of the best targets for shoplifters as well as petty thieves and burglars.
This is the reason you must conduct a thorough investigation of any area or neighborhood prior to opening you POS store there. Do some research and find out the crime/theft rates.
If there are over two POS agents at your desired area, it’s best to look for a different location.
Many customers will have had a familiarity with your shops, and many won’t visit your store in huge amounts (unless you have a competitor that is not open on the day).
#4. Other elements
There are other elements to consider before deciding on the best area for your POS company.
- The number of people living in the region
- The profile of the people living in the region (most wealthy don’t make use of the POS)
- The proximity to banks (not everyone will utilize the POS service even if a bank is 10 minutes away)
2. Make your POS business strategy
It’s true that it’s a local business does not mean that you should not create plans for your business. Although it’s not required however, it can aid you in staying on track.
In your business plan, you’ll write down your goals and goals. Additionally, you’ll determine and estimate the amount it will cost to begin the POS company in Nigeria.
3. Fundraise the capital needed for the start of your POS business
This is a simple step. Once you’ve calculated the amount it will cost you to establish an POS company in Nigeria You must find a way to raise the amount.
4. Buy an POS machine
It is possible to purchase an POS device from the majority of commercial banking institutions in Nigeria along with several microfinance or Fintech banks. There are some things to think about before selecting your POS service supplier.
- Network or service
- The cost of POS machine
- Charges for transactions
Certain POS companies charge 0.65 percent and N10 for transactions less than N10,000. Any transactions that exceed N10,000 are charged N50. Some banks, however, only charge N10 for all types of transaction.
Also, make sure you evaluate against the other POS service providers before you make your decision.
5. Find a store
After you have done your research and made your choice about the location for your new POS company the next thing you need to do is search for a store that is currently vacant in that location.
If it’s a crowded location, and all local shops are booked or have already been rented out, then you might want to consider purchasing small containers or even putting up an enormous umbrella.
A POS business can earn a lot of money in Nigeria in the event that you locate the right place. If you are unable to locate an establishment to lease at the exact location you’re looking for then you can get the use of a container to run your business from there.
It is also possible to purchase an enormous umbrella as well as a table made of plastic as well as a few chairs. This will increase your security (as there is no way for a thief to rob your property in the presence of the entire world). However, you’ll be exposed to extreme weather conditions.
No matter which one you pick you choose, it will not affect the customers you serve. Profit will be earned for each transaction which will add to. At the end of your week, you’ll be delighted with the profits you’ve made.