How to start pos business in nigeria

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POS business is one of the thriving businesses in Nigeria. On almost every street, there are one or more POS stores there. POS stands for Point Of Sales. It is a lucrative business anyone can venture into. 

POS is also known as mobile Banks. They operate as banks as they accept deposits, BVN enrollment, withdrawals, and other financial transactions.

Overview of POS Business In Nigeria

POS business in Nigeria started in 2013 when the Central Bank of Nigeria (CBN) launched an agent banking system in Nigeria. This agent banking operation helps and extends banking or related financial services to areas without Banks. 

POS business in Nigeria has helped to reduce the endless queues that occur at Banks. POS also helps to eradicate the stress and cost of transportation to banks.

How Does POS business Operate in Nigeria?

POS agents operate under a POS provider, a bank, or any Licensed Fintech company. The Agent has Cash in possession for transactions and bank charges.

In the POS business in Nigeria: the POS agent offers financial-related services like transfer, withdrawal, bill payments, and bank account opening. The POS machine enables the POS agents to carry out cash transactions With the customer’s ATM card. The Agent selects the type of transaction and amount while the customer slots his card into the POS machine and inputs his 4 digits ATM card.

The POS device has a GPRS network that helps connect to the Device’s bank to get approval for the transaction; if successful, it produces receipts for both the customer and Agent.

How Do POS Agents Make Money?

POS Agents majorly make money from service charges on transactions made by their customers like withdrawals, buying of airtime, data, and deposits.

POS agents collect 100 nairas as a service fee on every transaction from 5k and below, 200 on transactions from 10,000 to 20,000, and so in such format.

The POS provider takes a percentage from the charge fees and gives the remaining money to the agents. POS agents can also make money by selling things like groundnut, banana, biscuits, fruits, etc., besides your POS shop.

Is POS Business Profitable? This business is very lucrative as POS agents make 5k to 20k daily, depending on your location and competition.

POS shops in Urban areas make more money than their counterparts in the Regular areas. If you were lucky to be in an area where you are the only POS agent, you could make 15 to 20k every day.

According to CBN: As of October 2021, over 4 trillion naira worth of transactions have been done on POS terminals yearly, showing how profitable this POS business is. 

One major reason why POS is thriving is because of the distance of banks from some areas and the queues at Banks.

With POS, anyone who needs money quickly or makes a fast transaction can easily do it instead of waiting and getting delayed by the Banks. 

This has made the POS business a reliable alternative to banks as it is more efficient and quick than Banks.

Services Rendered By POS 

Here are the services that you can render with your POS machines :

  • Bank account withdrawals
  • Accept deposits to your bank account
  • Personal account opening
  • BVN enrollment
  • Transfer of funds
  • Payment of bills like Electricity, water, TV subscription, Exams Tokens, and Airtime.

Advantages of POS business: POS as a business has many advantages. I will be showing you the advantages of starting POS.

1. Low Capital to Start: POS business can be started with as little as 50,000 to 100,000. POS business does not require huge capital to start as the basic tools you need include a POS machine, Cash for transactions, and a signboard. It is affordable to start as anyone can launch this business even if you are a student, stay-at-home Mum, Retiree, Aged 9-5 worker, etc.

2. Huge Patronage: POS is a business that does not need advertising as you will enjoy high traffic of customers.

Financial transactions are done daily as people will certainly withdraw, transfer and deposit money. With POS banking, you can’t go dry of patronage.

3. Can be used as a Side Hustle: Agent banking is a simple business that can be used as a side hustle as one can continue his studies, Job, and Vacation while also operating a POS Store. To use POS as a side hustle, just employ a POS attendant to be working for you while doing your studies, Job, or hobbies.

Disadvantages of POS business: Like everything in life, what has advantages must have disadvantages. POS, like any other business, has its pros and cons. I will now show you the disadvantages and bad sides of the POS business.

1. Insecurity: With the insecurity situation in Nigeria, the POS business is risky as it requires a lot of courage and bravery. POS business involves transporting huge Cash from banks to their pos offices, making them a soft target for criminals to rob. This is the biggest disadvantage of POS, but you can set it up if you are brave and careful enough.

2. Fraud: POS is a fraud risk as some miscreants and fraudsters may trick you and chart away with your money. This has happened in my presence, as a young man came in and did a fake transfer to the POS machine with his phone and withdrew 40,000, which the POS boy gave him, and after he left, you discovered that it was a fake transfer. If you are not careful or are a newbie, you might get defrauded. 

To avoid this, learn the ropes from an experienced POS attendant who knows how to spot fake transfers and deposits.

3. Irregular Electricity: In Nigeria, we have an unstable power supply; this might pose a threat to operations of the POS business as POS devices need to be fully charged to perform transactions. Without steady Electricity, the POS business will suffer a lot. Get a standby generator or a solar panel to power your POS devices to solve this problem.

4. Bad Network: POS machines use a GPRS network to connect to the bank to get approval for financial transactions. Anytime there is a poor internet connection due to weather or technical issues, you can not operate with the POS device. Also, there are villages where the Internet connection is not solid, and POS machines will not be fast as usual.

Apart from delaying transactions, a poor network can also cause unwarranted debits from the bank without it reflecting on the wallet of the POS agent.

Factors To Consider Before Starting A POS business. 

Before starting a successful and profitable POS business in Nigeria, there are some factors one needs to consider before setting up. Considering these factors might make your POS business fail or not make many profits from the POS work.

Here are the 5 major factors to consider before starting your POS business.

1. Location: This is one important factor to consider before starting a POS business. The best location to site a POS shop is university campuses, markets, supermarkets, cities, parks, etc. If your business is located in a good area, your business will be profitable.

2. Network: Since POS Machines use an internet connection to operate, a stable internet network is important to consider before starting your business. Without a strong network, you can’t do transfers and withdrawals with your POS machine. So you won’t like to delay your customers who want to carry out transactions with you. Having regular network failure will scare away customers from you. 

Before you start a POS business, check the internet conductivity of the area. The place should have at least 4G networks and a nearby network. 

3. Number of Competitors: The number of competitors operating a POS business in an environment could also be a factor to consider before launching a POS business in an area. To have a profitable POS business, choose a place with zero or low competition. A good place to start POS should not have not more than 4 fellow POS business operators near your intended POS business. 

4. Nearness to Banks: This is another factor to consider before starting a POS business in Nigeria. Locating a POS business in an area where a bank is very near will not benefit you, as many of your intended customers will prefer going to banks than patronizing you. So make the POS machine store in an arena where banks are far from. 

Nearness to banks has its advantages and disadvantages, as nearness to a bank can also aid you in transporting Cash from your bank to your POS station.

5. Level of Theft or crime rate: The level of crime rate in the area is one determining factor to consider. Moreover, It will be very risky for you to operate a POS business that involves the movement of Cash in an insecure area. Before you start your POS business, make investigations about the place’s security and calmness.

Operate your pos business in a peaceful environment to avoid robbery from armed Robbers.

Profile of People: Social profile of people living in a particular area should be considered before starting. Suppose the people residing in an area are Rich and influential people. In that case, your POS business might not be successful as Rich men always transact huge amounts of money, which you don’t have as a POS attendant. Most rich men prefer making financial transactions at banks because of the huge amount of money they deposit or withdraw.

Requirements For Starting A POS Machine

1. Must have an existing business: This is one major requirement for starting a POS business. According to CBN, POS agents must have a business that has existed for over 12 months; to avoid scammers and fraudsters who might scam Nigerians of their money. It also helps to eliminate individuals with questionable characters. POS is a business that can be used as a side hustle or main hustle. Start any small-scale business and apply for POS to supplement your income.

Another important to know is that you must duly register your business with the Corporate Affairs Commission (CAC)

If you don’t have an existing business, you can get a POS machine indirectly by buying or begging pos devices from POS attendants with more than 1 POS machine.

2. A new Bank account: You can’t be running a POS business with your bank account. Create a new account with any preferred bank and use it strictly for POS transactions.

3. Choose A bank or Fintech Company: Almost all banks and some fintech companies in Nigeria support agent banking, otherwise referred to as POS. Just select any of the numerous options and apply for a POS machine. Each bank has a different amount charged on transactions. Some banks pay a higher commission to POS agents than others.

4. Submit Necessary Documents: While applying for a POS machine, submit vital documents as requested by CBN. Documents to present before becoming a POS agent include:

  • Valid means of identification like NIN or Permanent Voters Card (PVC)
  • Two recent passport photographs.
  • Your Bank Verification Number (BVN)  
  • CAC certificate
  • Tax Identification Number (TIN)

5. Proof of Start-up funds: According to CBN rules, the minimum working capital required for starting a POS business is 50,000 naira. 

6. Get a banner or signpost that advertises your POS business. You can get a graphic designer to design a colorful and beautiful banner.

If you have all these requirements and pass the bank application, you will receive the equipment for the POS business from the bank, which includes 

POS terminal: This is a little portable device that enhances the payments of goods and services through debit cards.

Barcode Scanner: it helps to scan bills for payments for bills like Electricity, water, and TV bills.

POS Personal Identification Number (PIN): This enhances the security of the POS device to avoid unauthorized use of the POS by another person.

How Much Does It Cost To Start A POS Business In Nigeria?

There is no specific amount to start a POS business as it depends on some factors, including shop rent, POS, and startup capital. Some agent bankers got their POS free after passing their bank application process, while some buy POS from their banks at prices ranging from 35k to 50k.

I will recommend anyone who wishes to venture into the POS business should set aside 70,000 to 100,000 naira for the business. 

Major POS providers In Nigeria

If you aspire to start a POS business, here are financial institutions that can give you POS machines.

  • First bank
  • United Bank for Africa (UBA)
  • Zenith Bank
  • Access Bank
  • Wema Bank
  • Guaranty Trust Bank (GTB), etc.

Other Financial companies that offer POS services are

  • Opay
  • Palmpay
  • Kudi
  • Baxi
  • Quickteller 
  • Paga etc. 


Those are the steps required to start a successful and profitable POS business in Nigeria. Follow these steps and establish the POS business of your dream.

I will advise you to be careful of scammers and thieves as they are one of the major challenges facing Mobile bank agents in Nigeria. Don’t move with more than 200k Cash in your purse or bag to avoid being targeted by armed robbers.

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