It is no doubt that POS businesses help to extend the services provided by financial institutions to previously unreached segments of society, especially after the Central Bank of Nigeria (CBN) introduced the agent banking system in 2013, which began to spread in Nigeria. This created a new channel for financial services to reach bank customers in remote, unbanked, and underbanked communities.
Long lines and erratic network services at Automated Teller Machines (ATMs) drive many customers to seek alternative methods of receiving money or conducting transactions. Aside from that, it allows customers to withdraw money easily when the nearest ATM is a long distance away. In other words, POS companies make it simple for customers to get the money they require in exchange for a commission.
Do you want to start a POS business in your neighbourhood? It is a profitable business. In this article, I will teach you everything you need to know about successfully launching a POS business in Nigeria. This article contains all of the information you’ll need to get started as a bank agent.
POS companies provide the following services:
- Enrolling in the Bank Verification Number Program (BVN)
- Cash withdrawal
- Opening bank accounts
- Cash deposit
- Paying utility bills such as electricity, airtime, and water, among other things.
- Transferring funds to any bank account
How to Start POS Business In Nigeria
1. Have a capital:
As previously stated, the capital required for the business is minimal. You also don’t have to be concerned about your shop’s extravagant furniture fittings. A modest store with a prominent sign advertising your services works well.
2. Get a good location
Semi-populated areas are ideal for this type of business. Look for crowded areas with high pedestrian traffic, such as markets, parking lots, and residential areas.
3. Contact a Financial Institution (Bank)
Almost all Nigerian banks accept agent banking services. When you’ve decided on a bank to use, the next step is to approach the bank and learn more about their requirements.
- A valid form of identification, such as a driver’s license, national ID card, international passport, or voter’s card, is required.
- Two passport photos
- 2 references to current accounts
- Proof of business registration (CAC Certificate)
- Memorandum and Articles of Association for a Tax Identification Number (TIN).
- Report from the Credit Bureau
- A minimum working capital of N50,000 is required.
4. Get Your Equipment Ready
Once your application is approved, the bank will provide the necessary tools and equipment for your business. Aside from the mobile phone, the bank usually provides the following materials:
- Point of Sale Terminal; a portable device that accepts payment cards for goods and services at bank agent locations.
- To scan bills for bill payment transactions, use a card reader and a barcode scanner.
- Personal identification number (PIN), and so on.
How do POS agents make money?
In Nigeria, the POS industry is extremely profitable. This is due to a lack of access to banks in rural and remote communities. Once you have a good location and have earned the trust of the locals, you can earn as much as 7,000-10,000 Naira per day on average.
This figure is derived from the commission received from each customer who uses the POS machine. A percentage is also paid to your POS provider, with the remainder going to you as commission.
The POS industry thrives more in rural or semi-urban areas where there are no banks or only a few ATMs. As a result, if you want to get into this business, the first thing you should do is make sure that there aren’t enough banks in your area to serve the community. This way, you can be certain of making a profit.