This article will explain how to start a POS business in Nigeria. This business is a fast-growing one today, especially in an area where the ATMs are scarce.
It has helped both the business owners and their customers tremendously. The POS business owners make a lot of profit, while the customers’ stress is reduced simultaneously.
This scarcity shows that it will thrive in rural areas where banks and ATMs are faraway. The exciting aspect of this POS business is that it is not limited to sending and withdrawing cash.
Other services like Bill payments (GOtv, DStv, PHCN, Startimes, and others), airtime sales can also be rendered. We have shops/supermarkets in Nigeria that practice a cashless policy, and they take advantage of the POS.
About POS Business
POS is an acronym for Point of Sale, and it is a portable device used to carry out financial transactions like withdrawal and deposit.
Meanwhile, the POS Business also referred to as agent banking, started around 2013 when approved by the Central Bank of Nigeria.
Since its approval, it has served as a retail financial body for banking services to reach a wider audience quickly.
This business allows customers to deposit cash, withdraw, and pay bills. Even if you are situated in an urban area, the fact is that not everyone is patient enough to stand in ATM queues for minutes.
Therefore, you can run this business almost everywhere but always watch out for the banks and ATMs’ proximity.
How to Start a POS business in Nigeria
Judging from what you have read so far, you can quickly tell the factors to consider when choosing your POS business location.
Yes, you have to look at the number of banks and ATMs present in that area. If they are much, you shouldn’t start there, but you should follow the steps below to begin a POS business in Nigeria when they are only a few of them.
- Own a Business Already
Before thinking of starting a mini financial institution like the POS business, you will need to have enough money at hand. Thereby, having an existing business is one of the best ways to make this a reality.
Aside from that, the Central Bank of Nigeria will not approve a POS business for someone without an existing business. So make sure you get that ready.
Meanwhile, that business must have been running for a minimum of 12 months and have been registered with the Cooperate Affairs Commission (CAC) either as a sole proprietorship, public entities, cooperating societies, partnership, limited liability companies, and others except for NGOs and faith-based body.
- Go to the Bank
Almost all banks in Nigeria allow the POS business, so it is left for you to choose. All you need to do is to make sure that the required documents are ready.
Just visit the banks to inquire about their requirement, fill the necessary forms, and submit the documents demanded.
Among these documents include; BVN, Credit bureau report, evidence of business registration, two current account references, Tax Identification Number, 2 Passport Photographs, Valid ID Card (Voters Card/National ID/International Passport/Driver’s License), Memorandum and article of association, and a minimum amount of N50, 000
- Get your Business Equipment
Different businesses have different equipment, so the POS business is not left out. For you to start this business successfully, below are some equipment to get ready;
- POS Terminal – This is the essential equipment to start this business. It is where all the financial transactions are carried.
- Barcode Scanners
- Card Readers
Where your POS business is located will go a long way to determine the level of your success in the industry. Like I mentioned earlier, you should consider staying at a place where there are fewer banks and ATMs.
Some other great locations include; bus stops, event centers, markets, and others. These places are bustling, and you are likely to get more clients there.
Meanwhile, it would be best if you did not forget to stay secured by using strong doors and burglaries for your shop and stores.
- Start the Business
Having gone through the steps above to start a POS business in Nigeria, you need to start rendering your services.
Among these services are highlighted below;
- Checking of the account balance
- Withdrawal of Cash
- Deposit of Cash
- Transfer of cash
- Payments of bills like taxes, utilities, subscriptions, and others
- Mobile banking
- Repayment of Loans and Disbursement of cash
All these services highlighted above are profitable and are high in demand. So you can try to include yours if you know any.
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Benefits of POS Business in Nigeria
Both business owners and their clients have all benefitted from this POS business in Nigeria. The advent of this business has made life easier for consumers because of the following reasons;
- It reduces the cost of transport fare to a faraway bank and ATM.
- It saves the stress of walking or driving a long distance.
- Customers are safer using POS.
- It is reliable to a reasonable level.
- It saves the stress of standing in a long queue.
While the POS business owners can benefit through the below;
- Banks pay commission based on the number of transaction that occurs.
- It is a fast-moving and profitable business.
- You are allowed to charge customers based on the services you render.
At this point, I believe you now know how to start a POS business in Nigeria and the factors to consider before getting started. We have also discussed the benefits.
Therefore, if you have it in mind to start a POS business, you should take action and follow the steps shown above.
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Don’t forget to let us know what you think about starting a POS business in Nigeria in the comment section below.
If you have any questions about what we have just discussed, you should not hesitate to share them with us.