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Starting a POS Business

Starting a POS business in Nigeria is currently one of the hottest businesses to start for the average Nigerian. It is slowly taking over ATMs because of the ease and convenience it provides consumers. A POS business or mobile money agent makes cash available to people in exchange for a commission or fee through a POS machine.

Because of the scarcity of Automated Teller Machines (ATMs) and the long queues people experience at ATMs. You can now find someone running a POS business everywhere you turn in Nigeria.

In this guide, we will take a thorough look into POS business in Nigeria. Its common challenges and disadvantages, the cost of starting a POS business in Nigeria, how profitable and lucrative it can be.


What is POS business in Nigeria? 

A POS (point of sale) machine was created to make businesses, merchants and retailers collect payment for goods or services without the need for cash. But since then POS machines aka terminals are now being used by banks in Nigeria and fintechs (financial technology companies) to improve financial inclusion by bringing financial services to the unbanked and underbanked population in Nigeria.

So essentially, you dont need to visit a bank to perform most financial transactions. You can do these transactions at a  POS centre.

So people who did not have acess to banks or banking services can now enjoy these services as long as there is a POS business close to them. Especially for people in remote and rural communities. This is why POS business is gaining popularity in underdeveloped and developing nations.

The people who start a POS business in Nigeria are commonly referred to as POS agents. POS agents get money from the commissions when they carry out any authorised financial transactions on behalf of consumers/customers.

A POS business in Nigeria isn’t just for making payments and transfers. You can use it for airtime recharge, DSTV & GOTV payments and even for paying tax.

Services of a POS Business or Mobile Money Agent in Nigeria

A POS agent business or a Mobile Money Agent in Nigeria can offer the following services to people around where their business is located.

  • Open new bank accounts (some terminal)
  • Deposit & Withdraw Money to and from any Bank
  • Send money
  • Make Bill payments like electricity, Cable TV, airtime and tax payments.
  • Enroll for BVN (Bank Verification Number) (some terminal)

Is POS business profitable in Nigeria?

On average, starting a POS business can be profitable and lucrative. Especially if you already have another business with a location that you are currently running. As it reduces the amount of capital you need to start this business.

This is because more and more people are patronising POS centre’s every day to carry out their financial transactions and stay away from the stress that banks give.

POS business is also profitable in Nigeria because a lot of remote places have no bank branches, so POS agents have become the de-facto banks. And a POS agent or business doesn’t have to do any marketing as they’re in the public eye and customers will always come to them for the ease they provide.

POS agents have now become a true alternative to going to the bank especially for cash withdrawals and transfers.

POS business in Nigeria doesn’t require so much capital to start and you can start making money the day you launch the business. Just make sure you have a very good location. On average a POS agent in Nigeria can make N5,000 to N10,000 daily depending on their location and how they’ve built trust with their customers especially those around them.

How do you make money from a POS business in Nigeria? You make money from the commission you get from every customer that comes to use your POS machine. Say if a customer wants to withdraw N5,000. You’ll charge N100 for the transaction and share it with you POS Provider. You can take N60 as your commission while the bank of compqny takes N40.

How much does it cost to start a POS business in Nigeria?

There is no fixed cost for starting a POS business in Nigeria. The cost of starting a POS business can depend on if you secured a location (shop) or not. Then it also depends on if you’re getting a POS machine for free or not.

 The main cost that you’ll require for starting a POS business in Nigeria is the cash at hand you’ll need to make withdrawals possible. This can range from ₦250,000 to  ₦150,000. 

Getting a new POS machine/terminal from some banks or fintech companies in Nigeria can cost between N85,000 and N100,000 only. But some also offer free POS machines, but you must meet their requirements with a cautionary fee. 

How much is a POS Machine in Nigeria / Cost Of POS Machine in Nigeria?

The cost of a POS machine in Nigeria depends on the bank or company you want to be an agent of or you’re buying from. There is no fixed price for POS terminals in Nigeria.

The prices can range from N45,000 to N65,000 to N75,000, and can get as high as N200,000 depending on the specifications of the POS machine. Different POS terminals have different specs like  2G, 3G and 4G as well as other types of features.

Steps on Starting a POS Business or Become a POS agent in Nigeria

 Here’s are the steps you need to take to become a mobile money agent or start a POS business in Nigeria.

  1. Determine the cost of starting a POS business. The cost of starting a POS business in Nigeria can be different from person to person. Because of the different locations people stay in. The amount to rent a shop or space to start this business in Lagos will be different for in a place like Maiduguri. You’ll also need to know which bank or company you’re going to sign up to for you to become a POS agent. Do they offer free POS machines or you have to pay. Do their requirements entail any expense. You also have to consider how your shop will be. Do you need a safe? How are you going to secure the shop. These are some of the the things to consider to arrive at the cost of starting this business.
  2. Find a Location. Since this will be a physical business that will require lots of leg traffic it’s important to to get a very suitable. A suitable location will be a place that is densely populated.  It should be a place where a lot of people stay in and where there isn’t easy access to banks or lots of ATMs.
  3. Raise Your Capital. Since you determined your cost for starting the business, you now how much you need to start. All that you need is to raise the capital and you’re mostly on your way to becoming a POS agent.
  4. Apply to become a POS Agent. Depending on the bank or financial institution, applying to become a POS agent or for a POS machine might be outright purchase, lease or even for free. Determine which of them is suitable for you based on their requirements, commissions and charges. You can apply for a POS machine online or go the the bank or company’s office. But this process can take from 2 weeks to a month for everything to be set.

Benefits & Disadvantages of POS business in Nigeria

The benefits of POS business in Nigeria to both the business owner and customers are:

  • It can be another good stream of income for small business owners 
  • Provides ease and convenience for people as they don’t have to go to the bank to make cash transactions.
  • Promotes financial inclusion in the country.
  • Reduces exposure to theft, as people don’t have to carry so much cash around. to armed robbery a.
  • Increase in sales for Merchant as they can cater to both cash and card-carrying customers.

The disadvantages and challenges of owning a POS business in Nigeria are:

  • Robbery attacks. Because of the nature of this business (deals with cash) it can attract robbers and criminals to the enterprise. Since you cannot hire a security guard for this business. You’ll need to be very security cautious and take precautions with how you move and hold money. 
  • In this business you can encounter issues with Banking Networks. So its important that whatever POS agent service you decide to work with , that they have reliable network services. Some people combat this by having up to three different POS machines.
  • Because of the erratic power supply in the country, its important to make sure your POS machines) are always charged. A powerbank / small generator might not be a bad idea.
  • Lack of regulation in Agency banking: Because of the lucrativeness of the POS business, a lot of people are pouring into it and there’s a lack of regulation in this industry. In some places some POS shops are so close to each other. There is no regulation that guides the spacing of the shops.  And there is no fixed charge for POS agents per se, so charges can differ from agent to agent. 

In order to purchase your POS machine (as an agent or business merchant) in Nigeria, Contact via WhatsApp or an email

Best Regards, 
Adebanjo Adedayo .B.
Founder & CEO at Cayene Hands – Your IT Growth Partner…

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