Since its inception, the POS business has gained widespread recognition and acceptance due to its usefulness in alleviating the stress that individuals go through when it comes to sending and receiving cash.
Instead of queuing in line for several hours, with your ATM card you could easily make withdrawals and transfers through the POS machines.
Currently, the Nigerian Inter-Bank Settlement System (NIBSS) is concerned about the continued failure of transactions using POS terminals since it’s affecting the cashless policy of the government and financial inclusion progress by banks.
Without a doubt, the number of POS businesses in Nigeria is rapidly expanding, but then, just like every other thing, operating a POS business in Nigeria has its own disadvantages. Let’s take a look at some of the most important disadvantages to consider — both to you and to your customers.
Disadvantages Of POS Business In Nigeria
1. Network issues
This is a common situation in every POS terminal, 20 out of 30 Nigerians have experienced this. One would have to wait for over 15 minutes looking for a network to process the information to carry out the transaction
This can cause frustration for both parties especially the operator when there are many customers to attend to.
2. Customer’s information is at risk
Your private personal information is at risk. It is advisable to enter your PIN with caution as it could be eavesdropped on by someone behind or beside you, and there is a very good tendency for that information to be used against you.
Although the majority of service system suppliers have taken precautions to conceal the terminal’s keypad, none are totally risk-free.
3. Adaptation of bad spending habits
Since you’re card is always handy, there will surely be an increase in money lavishness, due to the quick access to funds, coupled with the over populated POS stand around
4. Fraudulent machines
This is a personal experience, I’ve seen of a case where a POS machine was set to save the PIN of a card, with that done, the POS agent can redraw from your bank account, anytime and any amount. So using the POS machine is a big disavantage cause fradulent machine can be used to copy card details.
5. Increase in crime rate
There are high chances of your ATM card, being stolen. The robbing of POS agent is also another crime factor.
6. Expensive web-based fees
On the part of the POS agents, he or she will have to continuously pay a monthly subscription fee, which will reduce your long-term return on investment.
Also, he or she wants to be sure to figure these monthly expenses into the budget when considering the purchase of this type of POS system.
7. Delay in the reversal of money
This occurs frequently when the card of the person making the withdrawal is debited and the return is delayed
Although this problem use to happen more to the banks, especially back in the days when you had to fill out a form and wait a few days for the ATM to be deducted from your account when the transaction didn’t go through.
The story has changed for the good from the ATM side of the matter, but however, POS operators are still dealing with this problem. Many customers have stopped patronizing POS agents In Nigeria as a result of the failure in the system in reversing the wrongly debited amount.
8. High cost of service
POS terminals or system is costlier compared to old cash registers or manual methods.
9. Virus & Malware
The POS machine can even be infected with Malware, although this is in rare cases
10. Hardware-related issues
It’s tough to repair the hardware in web-based POS systems. Despite the fact that you may be able to contact the manufacturer for assistance in troubleshooting the problem, you may still need a costly and time-consuming visit from a service technician to resolve the issue and resume business as usual.
11. Difficult Customers
Based on the POS agent, dealing with and handling customers alone is difficult. Many customers believe that because customers are always right, they can do anything. Many people will show up with malfunctioning cards or cards with insufficient funds, claiming to have credit, resulting in a waste of time.
12. Poor Revenue Due To Oversaturation
Due to the mass population of POS agents, locating an area with a low level of competition can be difficult because you don’t want to cite your firm in an area with a lot of POS businesses. The lesser the competition, the more transactions will be made and the revenue from those transactions will be higher.
13. Dishonest Staff
Staff are the spine of most businesses. A dishonest staff is a cankerworm that is ready to eat deep into your investment, not minding whether or not you make a profit. Unfortunately, you are more likely to suffer from this when operating a POS business. If your stall is located in a place where the crime rates are high, you would need to be very careful whom you employ. Although, being careful is never enough, you’ll need good luck as well.