How to Start a Successful POS Business in Nigeria - 2022 – MyGeeksGuide

How to Start a Successful POS Business in Nigeria – 2022

One of the fastest growing businesses in Nigeria is the POS Business, it is one of the most advanced payment accepting machines that enables people to perform financial transactions like funds transfer and withdrawal, airtime sales, 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

The POS business, also known as agent banking, began in 2013 after the Central Bank of Nigeria released its guideline on the operations and management of the business. Since then, it has remained one of the retail channels of several commercial banks to make their banking services reach a large number of people.

It thrives more in rural areas, semi-urban centers, the unbanked and underbanked communities. It is similar to any other remote banking channel. The banks equip the agents with a point-of-sale (POS) card reader, mobile phone, barcode scanner, personal identification number (PIN) pads, personal computer, etc. They are third party agents and can be an agent to as many banks as they can serve.

How To Start POS Business In Nigeria

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The POS business thrives more in rural areas or semi-urban centers, where there are no banks or few ATMs to serve the people. Hence, if you intend to venture into this business, the first thing is to ensure that the number of banks in your location cannot serve the community. This way, you are sure of making a profit.

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In this article, I have highlighted a step-by-step plan on how to start a POS business in Nigeria and the basic things you need to get started.

#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 authorise an agent for their retail banking.

To be eligible, you must have an existing business in operation at least for 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;

  1. Liability Company
  2. Sole Proprietorship
  3. Partnership
  4. Cooperative Societies
  5. Public Entities
  6. Trusts or any other entity aside from faith-based or NGOs.

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

#2. Approach a Bank

Virtually all Nigerian banks allow agent banking services. As soon as you decide on the bank of your choice, the next thing is to approach the bank and get details of their requirements. 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 agrees with you if you meet all requirements.

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

Requirements For POS Business

Some of the required documents include;

Valid means of identification e.g Driver’s license, National ID card, International passport or voter’s card.

  1. BVN
  2. 2 passport photographs
  3. 2 current account references
  4. Evidence of business registration (CAC Certificate)
  5. Tax Identification Number (TIN)
  6. Memorandum and Article of Association.
  7. Credit Bureau Report
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#3 Get the materials (equipment)

Once your application is considered, the bank then supplies the needed tools and equipment for the business. Aside from the mobile phone, the following materials are usually provided by the bank:

  1. Point of Sale Terminal; a portable device that facilitates payments of goods and services at bank agent locations using payment cards.
  2. Card reader
  3. Barcode scanner to scan bills for bill payment transactions
  4. iPersonal identification number (PIN) etc.

#4. Location

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,campus or students environment etc. All of these factors will affect your daily profit.

Once you have a good location, 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.

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.

#5. Render Services

The business is rendered through 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 The POS Business Work?

In a POS business, the client first requests a 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 inserts the debit card into the device and asks the client to enter the four-digit pin secretly. Then, 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.

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How Do POS Agents Make Money?

The business has provided 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.

What Does It Cost To Start A POS Business

The main capital you need for this business is the cost of the machine and the funds you would be dispensing to your clients. This should be between #50,000 – #250,000. Certain FINTECH companies like banks offer free POS machines to entrepreneurs.


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 be situated in places with 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.

Temmy Ade Jnr

Ayare Temidayo Ade Jnr popularly known as Temmy Ade Jnr is a blog writer, graphic design, tech and Educational coach,a biologist, Chemist and Educationist. We are here to serve you better.

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