How To Start A POS Business In Nigeria And Its Challenges

In most developing countries such as Nigeria where most retail businesses does not have electronic means of payment, consumers resort to carrying cash around. However, in a scenario where the Automated Teller Machine (ATM) is crowded – as commonly seen in Nigeria. The only option is to look for a nearest place to get cash – that is what POS business in Nigeria does. In other words, POS merchants makes cash available for consumers in exchange for commission.

Notwithstanding, most individuals are skeptical to enter into the business because they are not sure if POS business in Nigeria is Profitable or not. Nevertheless, In this post, we will discuss the common challenges with POS business and why you should consider it as one of the lucrative businesses one can venture in.

Having said that, an average POS merchant in a good location makes at least Ten thousand naira (#10,000) profit on a daily basis.

But before we go into details how it is possible and how it works, Let’s first explain what a POS business is and why you should consider it as a business idea.

What is POS business in Nigeria?

Point of sale (POS) is a place where a customer executes the payment for goods or services and where sales taxes may become payable. However, because the services of the banks does not serve everybody in Nigeria especially those in remote villages. Banks created POS business as a terminal to bring financial services closer to the unbanked and underbanked segment of the society. Meaning that, you can use a POS business center as a surrogate to going to the bank for your financial services.

firstmonie agent logo


Hence, this is a huge relief to decongest the already crowded banks and also a channel to bring banking services to the people in the rural communities where banks cannot reach. Therefore, this business is gaining a lot of popularity in most under developed and developing countries of the world such as Nigeria.

The POS business agents get money from the commissions they get from carrying out any of the authorized services as an agent.

Services of a POS Mobile Money Agent

As a POS agent or a Mobile Money Agent, you can run the following services for customers in your location of business.

  • Opening of Bank accounts
  • Deposit Money
  • Withdraw money from any Bank
  • Send money to any Bank
  • Pay utility Bills such as electricity, Cable TV, airtime and tax payments.
  • Recharge card printing
  • Enroll for BVN

Is POS business profitable?

From all indications, market surveys and the popularity of this business, the business is one that is lucrative. As a matter of fact, this business is one of the most lucrative businesses you can start with a small capital. As mentioned earlier, an average POS merchant in a good location makes at least Ten thousand naira (#10,000) profit on a daily basis. But, this assertion is not totally true for everyone doing a POS business due to some factors especially being in a good location.

On the other hand, there are few reasons why POS business in Nigeria will continue to be profitable irrespective of the location.

  • Most people don’t even know they can pay their utility bills online or through their bank app, so they will always look for a POS agent to help them.
  • Bank ATM in Nigeria are always crowded and sometimes unable to dispense cash. Hence, people find it easier to get money from POS merchants.
  • So many remote areas have few or no access to banks where they can do transactions. Their only banks are POS merchants.
  • It a business one can start with low capital and does not require any formal furnishing of shop. Meaning that, you can just start with a plastic seat, plastic table and an umbrella.
  • There are unlimited number of people who do many transactions daily in market places, streets, motor parks etc., so, you don’t look for customers, rather, they look for you.

These and many other reasons are why you see POS business creating job opportunities for many Nigerians.

Challenges associated with POS business

Every business has its pros and cons. You have read some reasons you will consider to open a POS business in Nigeria, now, here are some challenges to also consider and address before starting a POS business.

  1. Robbery: POS business like every other financial institutions attracts the attention of hoodlums. Since, you cannot hire a personal security agent, it is better you locate this business at a place that is relatively secure from attacks. Also, take precautions with how much that can be with you at a time and also the moving of the money to and from the bank.
  2. Banking Network: Its quite frustrating to reach a POS terminal and the agent complains of network issue. Consequently, your customers will start loosing confidence in your business if told same story couple of times. Therefore, to get the best from your POS business in Nigeria, try to make sure you subscribe for POS with a steady network services.
  3. Sourcing a POS machine: To obtain a POS is not too easy, especially for a business starter. The banks in some cases with require you register a business name with Corporate Affairs Commission (CAC) before applying for a POS machine. Others may tell you to wait for some months as there is no machine available at moment. All these and many more limitations makes sourcing a POS machine a challenge to the business.
  4. Power supply: To keep your machine running for hours, you must have a close-by spot where you can connect the machine. Because many POS agency shops are located in remote areas, there may be need to add the cost of generator to your budget. Therefore, some merchants resort to having more than one POS machine.
  5. Lack of regulation: Recently, every Dick and Harry is now in POS business. Therefore, there is no regulation to the spacing of shops, there is no fixed price on the charges per thousand naira and finally, good locations are extremely hard to find since the business is already getting crowded. However, this should not discourage you to try the business.

How to start a POS business in Nigeria

Below is a guide to a step by step method of starting a Mobile Money Agent or POS business in Nigeria.

1. Draw a POS business plan

It is encouraging that every potential business have a business plan. This acts as a guide/map of the business, the business organization type, the goals and how you wish to achieve them. But most importantly, try to set a time frame for you to achieve those goals. Therefore, POS business plan is important because it will be a business blueprint to people who wish to grow and expand in the future.

2. Conduct a market research

Like I said earlier, POS business is a lucrative one with so many potential opportunities. However, it is necessary that you ask questions about how to get customers, who your potential customers are, the bank with good commission rates, the cost and charges by the issuing financial institutions. All these and many other factors that affects the action and reaction you get in your business should be addressed and planned out before the birth of the business.

3. Raise your capital

Normally, Mobile Money agency is not capital intensive. The requirements are not plenty and includes; a location, a POS machine, a seat and a table. With #50,000, all these can be fixed and ready for use. In addition to that, you will have at least another #50,000 that you will use for the exchange. As a result, you will need to raise a capital of at least #110,000 to start.

4. Get a location

Another very important step in starting a POS merchant business is getting a suitable location for the business. In fact, this is the rate limiting step that determines the profitability of the business. Usually, good locations to establish a POS business in Nigeria includes; Motor parks, Markets, densely populated  Residential areas and villages/remote areas. Therefore, a good location for your business should be a place where people will need quick cash but with limited access to banks, this may be due to distance or population in the bank. Finally, a location may not be necessarily a shop. For starters with low capital, you can start in an open place so far your money is safe from theft or robbery.

5. Register a business name

This step is not necessarily important for everyone who wish to start the business. However, it is one of the requirements of some banks before they can issue their machine. So, if you want to add POS services to a previous business or have another means of getting a machine, then, its not compulsory. On the other hand, it is important you know Reasons why business registration is important.

6. Apply for the POS Machine

So many banks and other financial institutions issue out POS machines either on lease or on purchase. In this step, the choice of the bank to request for a POS machine will depend on their eligibility requirements and also their commission and charges. Therefore, check out the different institutions and decide on the one to work with.  To apply for POS machine in any of the institutions, just walk into the customer unit or call your account officer and request for a POS. You will simply fill a form, affix your passport and supply other details depending on the institution and will have to go and wait for at least 2 weeks to a month for the machine to be ready.

The most common issuers of POS machines are:

  • Zenith Bank mobile money agent
  • FirstMonie agent
  • Opay POS agent
  • Access Bank CLOSA agent
  • Quickteller paypoint agent
  • Ecobank Xpress point agent etc.

7. Install and start services

Once you get your machine, you can install it and try to operate and see if its working. Also, check the POS machine paper roll functionality. If everything works  as supposed, then its time to raise your banner and start looking for your first customer.


POS business in Nigeria is a lucrative one for people looking for a small business to start. This business requires a little capital, does not occupy much place and is very easy to run. However, there are challenges to the business such as Robbery, source of power and network. But on the long run, the business is worth trying because it markets itself.

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