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How to Start POS Business In Nigeria

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As Nigeria unemployment rate continue to increase, there are more concern on how to reduce it, create more job opportunity by the government so as to eradicate the poverty level in the country. In our today discussion, we are going to talk about steps on how to start POS Business in Nigeria.

POS business is another legitimate way to make money in Nigeria. It’s more profitable in communities with no easy access to banks and places where ATMs are not enough to serve the financial needs of the community.

POS business which is also known as agent banking business and it’s an extension of the services offered by financial institutions to enable easy service offering to a wide range of customers.

What is POS

How to Start POS Business In Nigeria

POS is known as Point of Sale, it is also called Point of Purchase (POP), it is a device that allows local debit cardholders make payment for goods and services mostly in a retail location. POS machine is a very good automated product because it reduces the stress of carrying cash around, transacting directly with cash etc. It also gives instant notification/confirmation of goods and services payment. That is why you receive alert whenever you do cash withdrawal or transfer with POS agent. POS business has its many challenges and Problems which you must know before going into the business and you will get to know them as you read on.

POS accepts debit/credit cards the same way ATM does. Buyers of goods can pay directly to a sellers account without using cash.

What can you do with POS

POS (Point of Sale) business offers services like funds transfer and withdrawal, sales of airtime, bill payments like GOTV, DSTV, Startimes, PHCN, and other utility bills. It is used in several places where goods and services are sold/rendered; places like retail shops, offices, supermarkets, fuel/gas stations, pharmacies, eateries, etc.

Reasons for starting a POS business

  1. It is very lucrative
  2. It offers more flexible and convenient access to existing and new customers. It ensures the safety of customers and help reduce traveling long distances to have access to banking.
  3. It plays a role in boosting the financial status of people
  4. It provides job opportunities to individuals
  5. It is sustainable because the consumption of these services will always be needed

How do they make money with POS Business

POS business provides job opportunities and financial stability by helping the agent make money in the following ways;

  • Commission: Banks pay agents commission based on the volume of transactions carried out on their behalf.
  • Service Charges: By rendering service to customers, you can also charge them a particular amount especially on bills payments, taxes, and subscriptions.
  • Float: Depending on your cash management policy, you can also make use of cash deposits, net of withdrawal for your primary business.

By operating this business, you are not only increasing your stream of income, but you are also serving the needs of the people in your community.

How To Start POS business in Nigeria

1. Have An Existing Business

The POS business has to do with finance and must, therefore, be approached carefully. Besides, the Central Bank of Nigeria is very particular about the business entities that qualify to be agents. So, extra care is taken by commercial banks before they authorize an agent for their retail banking.

To be eligible, you must have an existing business in operation at least for a period of 12 months. Also, you must have a shop or office from which you operate. Then, you must have been registered with the Corporate Affairs Commission as any of the following entities;

  • Limited Liability Company
  • Sole Proprietorship
  • Partnership
  • Cooperative Societies
  • Public Entities
  • Trusts or any other entity aside faith-based or NGOs.

As long as you have any of the above requirement, doing a POS business or serving as a bank agent is possible.

In case you don’t have an existing business, you can find a “host”

A host is a financial institution that is the source of the services you extend to your customers. Examples of good hosts include First Bank, Quickteller, Paga, FCMB, etc.

2. Start Up fund

You will need capital for office equipment, cash at hand for disbursement this help kick up operation. So at least you need 100,000 to 200,000 Naira

3. Meet a bank

Virtually all Nigerian banks allow agent banking services. So, as soon as you decide on the bank of your choice, the next thing is to approach the bank and get the details of their requirement. The CBN guide allows being an agent for as many banks as you can serve.

You will need to fill some documents/agreement forms on the transaction conditions. Then, the bank reviews the application in line with CBN, internal criteria, and enters into an agreement with you, if you meet all criteria.

Also, you must have an account for a direct deposit for the purpose of the business and provide some documents as part of the requirements for the proposal.

4. Choose a location

The location of your POS business is very important to your success. For you to thrive in the business, it’s advisable to choose a location with limited banks or places with few ATMs. Also, choose strategic locations like the bus stop, public market, event centers, etc. All of these factors will have much effect on your daily profit.

5. Get a shop

Once you have a good location, either construct a shed or shop but create enough spaces for swift movement for you and the customers. Have a banner displayed at the entrance to show the retail banking services you offer.

Then, for security measures, you can have a special purse/pouch around your neck or a safe with a strong lock to prevent theft and burglary.

Also Read: The Most Profitable Online Jobs in the World Without an Investment

6. Get a POS machine

Most of your customers will come to make withdrawals, so you will need to have a POS machine. The cost of a new POS machine varies. It is between N85,000 and N100,000 only, The difference here is just like having 2G, 3G and 4G so the higher the money, the better the service. Some banks like First Bank offers free POS machines but you need to meet their requirements.

You must have an account with the host bank. Most of these banks require you to maintain a current account while you are okay with a savings account for others. Contact your bank’s customer support or account officer

You will also need to collect the POS document from your account officer or the nearest branch of the bank. Some banks allow you to download the document online. Then fill in the required details, append the necessary signatures and submit with your bank.

Aside from the mobile phone, the following materials are usually supplied by the bank:

  • Point of Sale Terminal; a portable device that facilitates payments of goods and services at bank agent locations using payment cards.
  • Card reader
  • Barcode scanner to scan bills for bill payment transactions
  • Personal identification number (PIN) e.t.c

Typically, it takes several days or a couple of days to get the device delivered to you. Generally, POS terminals and support are free but you will have to pay a certain fee per transaction (typically, 0.25% with a cap or N1200).

7. Advertise your business

You should print banners and display them at your business location in order to attract customers. You don’t have to spend so much on your adverts.

Also, if you notice that an ATM is not dispensing cash, you can go there to advertise your service. Some people there in need of cash might subscribe to your service.

Designing and printing your banners shouldn’t cost more than N5000.

Also Read: How to make money during ASUU strike

Services rendered in a POS business

POS business is rendered through the use of POS terminals, card readers, mobile phones, and bank linked mobile wallets for real-time transaction processing.

As soon as you have these, the next step is to start providing the following services;

  1. Cash deposit and withdrawal
  2. Balance inquiry
  3. Funds transfer services (local money value transfer)
  4. Bill payment (taxes, utilities, tenement rates, subscriptions, e.t.c)
  5. Generation and issuance of mini statement
  6. Cash disbursement and cash repayment of loans
  7. Agent mobile payments/banking services

How does a POS business works

In a POS business, the client first request transaction like withdrawal, transfer, or bill payment and presents the debit card. Next, the agent selects the type of transaction on the POS terminal device and enters the amounts, then, insert the debit card into the device and ask the client to secretly enter the four-digit pin. Using the network, the General Packet Radio Service (GPRS) connects with the bank’s server to authorize the transaction. When successful, it immediately prints out the receipt.

This process can be repeated for as many customers as you can, as long as you abide by the transaction rules of your host (bank).

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Criteria for obtaining a POS machine

Some of the required documents needed to get POS machine from banks include;

  1. Valid means of identification e.g Driver’s license, National ID card, International passport or voter’s card.
  2. BVN (Bank Verification Number)
  3. 2 passport photographs
  4. 2 current account references
  5. Evidence of business registration (CAC Certificate)
  6. Tax Identification Number (TIN)
  7. Memorandum and Article of Association.
  8. Credit Bureau Report
  9. A minimum working capital of N50,000

The difference between getting free POS machine and buying your own

It is more ideal for you to buy your own POS machine than get the free version. When they say free it is not completely free because you will still part with some money to get the POS. A free POS machine is also called MPOS, so it is not a machine per say but something you can sync into your phone


To get free POS machine there are many conditions that follows.

  1. You must prove that your business can do a #100,000 transaction every day. It is mostly given to people who are already into or have done agency banking before and live in a high brow traffic areas.
  2. The money you pay for registration #15,000 or more is enough to add more money and buy for yourself. They call it agent registration and it is compulsory.
  3. You are the one to pay transportation fare for physical visitation of your location or the address where terminal will be used. And also for branding materials, courier for the POS delivery. Let’s assume the whole of these cost #20,000. Add this to the registration fee what does that tell you?
  4. It takes 30 days before you get the free mobile POS and you have to sync it into your smart phone before you can transact with it.
  5. As an agent you will not charge extra for utility bill, airtime recharge but only from the commission you charge user

Regular POS (only for purchase)

  1. It works independently without smart phone. You get instant value of amount transacted into your wallet. From your wallet you make transfer to your bank.
  2. You get your POS machine within 3 working days after payment.
  3. No target
  4. You earn extra commission on cable TV, utility bills, airtime recharge. Also you earn from the commission you charge users.

How to succeed in POS business

  1. Do not collect high charges. You can put #300 for a ten thousand Naira transaction that is 3% on every monetary transaction.
  2. Always be available at all cost in your location because if you keep absenting yourself clients will think that you are not a serious person.
  3. Since it involves money you have to be in a safe and secure position or place in order to prevent robbery of any form.
  4. Don’t accept large amounts for security reasons except you are well secured to prevent robbery attacks.
  5. Don’t arrive at your workplace late.

Challenges of POS business

  1. Power or source of light. Some rural communities don’t have steady light while others don’t have it at all. So you will have to spend more on fuel to power your generator after purchasing one in order to keep your business running and your customers smiling. The business involves the use of a machine and has to be powered with an electricity source every time.
  2. Network issues: Some people say phone transfer is better than POS but big Companies with many staff needs POS. Phone transfer is risky and very frustrating. Network is the major challenge. Some alerts take hours to come and sometimes you get a reversal of the money a customer has already confirmed you posted.
  3. Theft/robbery: POS business involves money-making, there is the fear of possible attack because you are exposed to it. To keep security means spending money.
  4. Inability to control the crowd that surrounds you.

How profitable is POS business in Nigeria

There is good profit in POS business because it involves rendering many services. With POS you can print and sell recharge cards. Only this one alone provides heavy gain not to talk of when you calculate other services rendered in a day.

The money you make from commissions; banks and cable is enough to make you financially free. The bank charges you receive is not directly from you but your customers. So you have nothing to lose but much to gain. But you have to charge according to bank commission or it should guide your charges.

Assuming you transacted with 40 people a day and your commission is #150 each that will give you #6,000. In a month you would have made #150,000 it could be more. Remember there are other services like recharge card sales, cable and Education voucher sales to make money from.

Also Read: Chinese Gift Card Vendors WhatsApp Number


A POS business is an additional way of getting income. Aside from your existing business, it is a way to expand service offerings and one of the best methods to cross-sell your products/services to walk-in customers.

The business needs to situated in places where there are no bank branches or busy environments with enough security measures in place. You are sure to increase your daily revenue if you get everything right.

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