One of the many things that have changed because of this innovation is the rise of point-of-sale (POS) businesses or terminals, which have made people’s lives easier and given them the chance to make more money.
Starting a POS business in Nigeria is fairly easy and doesn’t cause too much stress, especially if you want to start a reliable business that will let you make money on your own terms.
Starting a POS firm can financially assist folks who lack strong technological skills or other methods of landing well-paying employment in today’s cutthroat economy.
To start a POS business in Nigeria, you should:
- Find a location for your POS business
- Register the business
- Buy a POS machine from banks or any other POS provider
- Purchase chairs, umbrellas, banners, or any other tool you will require to run your POS business
In this article, we’ll talk about how to start a POS business in Nigeria step by step. We’ll tell you everything you need to know about how to start a POS business in Nigeria, including how much it will cost, what you need, what you should do, and how much money you can expect to make.
What is a POS business?
The Point of Sale business is a type of banking that is done by a third party. It started in 2013 after the CBN issued rules for setting up an Agent Banking System in Nigeria. In Nigeria, the Agent Banking regulation made it possible for consumers to get financial services from licensed Deposit Money Banks (DMB) through a third party (an agent).
When the POS business started up, it gave Nigerians more banking options. Even people who don’t have bank accounts can now use financial services from their remote villages.
One of the many reasons to start a POS business is that banks usually have long lines of people waiting to use ATMs or deposit money into their bank accounts. But with POS businesses, you can easily deposit or withdraw money from any terminal within reach.
The POS business gives customers a mini-banking experience by letting them withdraw, deposit, and sometimes open an account. For all of these services, the POS agent charges a fee.
The POS provider provides the POS machine, but the POS agent is an independent business owner who chooses to offer the services of the POS business to consumers in the way described above or for paying utility bills or buying things in shopping malls.
The requirements and cost of starting a POS business in Nigeria
Before starting a business, the first step is to do a thorough study of the target market and the things that could affect the people who might buy the product. The same is true if you want to start a POS business in Nigeria.
Before starting a POS business, you should think about the following:
Before you start a POS business, the first thing you need to do is find the best place for it. You do this by making sure there aren’t many banks in the area, since customers will prefer to use banks because they will charge them less or nothing at all.
You also need to find a place with a lot of people who live there or a place where many people have to stop as they go about their daily lives.
It’s good to pick a busy spot, but you should avoid areas with a lot of crime. In the same way, you can take a few steps to make sure your security is at its best by renting a shop and putting up barriers to keep people out who don’t belong there.
You must also make sure that your chosen spot has good network reception. You can solve the problem of bad network reception by signing up for every network provider. This will make sure that your service is always smooth and uninterrupted.
Also, you need to learn about your competitors, find out how many of them are in the place you want to open, and decide if you can compete with them.
2. Registration of POS business
At the beginning of the POS business, there weren’t many POS providers, so there wasn’t much competition. Sometimes, to become a POS operator or agent, you had to put down a deposit of at least 1 million nairas.
At the moment, many of Nigeria’s top FinTech companies have lowered their requirements. For some POS providers, you only need to provide unique information like your Bank Verification Number, a photo of your passport, and your National Identity Number.
Many people think that there will be expensive rules to follow, like CAC registration, which has stopped them from starting a POS business. Still, you should know that many POS providers don’t work that way.
3. Cost of starting a POS business
Starting a POS business doesn’t cost too much, but how big you want it to be is up to you. Once you’ve found a place, the next step is to get a point-of-sale machine from any company.
You can get a POS machine from banks or any other POS provider for a fee between N25,000 and N30,000, depending on the provider.
You can run a POS business with more than one POS machine, so you can easily switch to the other one if the network goes down on the first one. But people who are just starting out should start with one and see how the market grows before adding more.
The next things you should probably buy are two chairs, a table, and an umbrella to give you and your customers shade.
Every store has a name or a sign that says what they sell and what they do. So, you could also choose to get a rollable banner so that people can easily find your business.
Now that you have everything you need to start a POS business, you might want to get a notebook to keep track of your sales. You will need a notebook because, even though all transactions are recorded on the POS dashboard, there are times when they happen outside of the POS system.
Expected revenue: How much you can make in POS business
Yes, you opted to start a POS business because you want a business that can earn more money with you as the CEO.
Every customer pays an average fee of N100 for every transaction ranging from N200 – N10,000, which means that above N10,000 is N200 etc.
Before calculating profit, you must factor in the cost or fee charged by the POS provider. The fees are always unique, but some POS providers charge about N20 for every N100 you charge the customer, meaning you make a minimum of N80 for every transaction.
The above calculation iterates that the expected revenue in the POS business depends on the number of clients per day and the amount of money they transact. In summary, if you are in a less busy area where you attend to an average of 20 customers per day, then you will be making N1,600 or more per day. Some POS business rakes in 5,000 profit daily because of the number of clients they meet daily.
Last note on starting a POS business in Nigeria
Aside from the above list of requirements, there are still other things to think about before starting a POS business.
Even though it’s cheap and easy to run a POS business, it’s also easy to make mistakes that could cost you thousands of dollars in a second. Scammers have taken a big chunk of money from many POS agents. This usually happens when you sign off on a bank transfer that never worked in the first place. So, the only safe way to confirm all pending bank transfers is through your banking app, never by word of mouth or text message.
The POS business can be run by both old and young people. However, there are many online jobs that pay money that can be done at the same time as the POS business.
Last but not least, you should know that Nigeria has more than 200 million people, which is good for POS and any other kind of business.