Starting a POS business in Nigeria
We run transactions every day and our transactions usually involve money, POS has been a lifesaver, especially in Nigeria. Coping in a remote area where there is no bank can be devastating without POS. POS business in Nigeria can actually be a good business for you since everybody spends money every day and can be a lucrative business if you can start it too. You do not need to search for any other job if you can meet up the requirement and costs of starting this POS business in Nigeria.
So today, we will walk you through the entire process of how to start a POS business in Nigeria today. Starting the POS business in Nigeria is not a hard task and you can actually start with very little capital, however, there are some tasks and requirements you need to be aware of before going into the business.
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How Profitable is the Point-of-Sale (POS) Business in Nigeria?
The first question that people inquire about is how much money could be made in this business. According to extensive research and a series of interviews, the POS business is a very profitable venture, as establishing and operating the business do not require high overhead. Numerous factors influence the success of POS businesses in Nigeria, with the primary element being the business’s location.
Given that a POS firm’s target market is a group of people who have little or no access to banks and ATM machines, locating your POS business in locations with a large population but few banks or ATM machines means that you’ll cash out a sizable profit each day.
Daily profits are generated by service charges applied to credit or debit transactions conducted with you and (in some situations) bank commissions paid to point-of-sale personnel.
If you charge N500 for every 10,000 naira transaction, you might earn up to N2,000 on every N40,000 transaction.
The Benefits of a POS Business in Nigeria
There are lots of reasons to start a point-of-sale (POS) business such as the low operating costs and the great profitability of the firm. A point-of-sale business is a way to generate more income aside from the main one and at the same time it can make the lives of people who live in the area much easier as they don’t have to wait in the long lines at the bank to do their transactions.
The Disadvantages of the Point-of-Sale Business in Nigeria
It is beyond doubt that a successful POS agent is one who keeps (or carries) large amounts of cash on a regular basis, thus they become an easy target for robbers or other types of criminals who may attack them without any reason.
Moreover, fraudulent clients who come to POS agents with false or counterfeit money pose another problem to those agents, who, not being able to see or touch the counterfeit money, are quite worried about it.
To fight these two big dangers, it’s best that you put your business in a safe area and that you rent a store or building that’s hard for someone to break into. Moreover, find out how to spot fake money so that you don’t lose large amounts of money due to carelessness.
How to Establish a POS Business in Nigeria
1. Locate a Shop in a Convenient Location
The first thing to get right when starting your business out is gaining access to a shop in a location advantageous to you. The more people, the more profitable business will be as you will get more money for servicing larger numbers of individuals in areas without banks.
If there is a bank nearby, still, it is essential that you place your business in a location such as the one where the customer has no time to go back to the bank or the ATM for a financial transaction. Having your shop in an area where residents are not bankable will give you a great advantage in running your POS business in Nigeria.
2. Contact a bank or an agent
Almost every Nigerian bank is an advocate of Agency Banking and is willing to help you, provided you meet the necessary criteria. Moreover, there are quite a few assigned agents equipped with the equipment required to help you start and run a profitable point-of-sale business.
Some of these are QuickTeller, Paga, PocketMonie, Opay, and FirstMonie. As per the standard operating procedures, you are required to fill out some agreement forms, which describe the terms and conditions of the transaction.
The next step is the processing of your application according to the Central Bank of Nigeria’s terms of service.
These banks and agencies demand a few pieces of documents, including the following:
- Proper identity, such as a National Identity Card, an International Passport, or a driver’s license.
- BVN Number
- Photographs for passports
- Referees
- A copy of your CAC-registered business.
- A minimum working capital of 50,000 Naira
- VII. Taxation Identification Number (TIN)
Once you have met all requirements and your application has been approved, you will receive all equipment necessary to operate your business properly, which means you can immediately begin operating your POS firm without interruption.
3. Provide High-Quality Service
Your consumers will continue to associate with you if you provide excellent services. While it is necessary to examine other factors that will assist you in getting started, it makes perfect sense for you to understand that what will keep you in business is a high-quality client relationship and service delivery.
Always strive to conclude each transaction in a cheerful and pleasant manner; in this manner, your consumers will always desire to patronize you.
4. Promote Your New Enterprise
This is an aspect of operating a point-of-sale POS business in Nigeria that is frequently overlooked. The majority of point-of-sale businesses rely heavily on “walk-in” clients who discover such enterprises exist in their neighbourhood on their own.
Because profitability is contingent on the number of people that patronize you on a consistent basis, it becomes critical to promote your business, even via the Internet, and inform people about your pricing and level of service reliability. Relying exclusively on “walk-in” consumers puts you at the vulnerability of your competition and whatever amount of clients come to you casually.
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The Cost of Establishing a Point-of-Sale Business in Nigeria
A minimum of 150,000 Naira is required to establish a POS business in Nigeria effectively.
The exact amount required to start a POS business in Nigeria is subjective due to the cost of acquiring all necessary equipment and the cost of renting or purchasing an office space (which may be a shop depending on your budget), which varies according to your location or the types of transactions you wish to render.
The most basic amount of money you’d need is enough to cover your first few transactions before you begin earning profits; this renders it one of those enterprises that a student can readily start on a limited budget.
Conclusion
The low investment necessary to initiate a POS business in Nigeria, combined with the business’s success potential, makes it an excellent business to start if you’re seeking a guaranteed profit with a very low overhead. The demand for banking or financial services continues to grow, especially in rural areas, which makes it quite easy to start and benefit from a business even in rural areas.
However, you must take care to position your business in areas with a healthy population and a strong emphasis on safety. Additionally, protect yourself and your business from dishonest customers who would patronize you with counterfeit currency.