How To Start A POS Business In Nigeria

How To Start A POS Business In Nigeria

When I think of a POS service, I picture “delivery service, but for money”, because that’s basically what POS service functions as.

Previously created so that payment of goods and services from business transactions would be made cashless(without cash), Point of Sale or POS machines have since evolved into lucrative businesses for many Nigerians looking to make some extra cash on the side.

In 2013, the Central Bank of Nigeria released a financial agreement, an agent banking scheme that allowed individuals to apply for agent banking opportunities, and the POS business has been flourishing in the country since.

Since its massive boom during the lockdown in 2020, POS agents keep popping up constantly, meaning that this is a business that needs little to no qualifications.

Woman paying using a POS machine

How The POS Business Works

Starting a POS business involves applying to a financial organization, where you become an agent of that institution, and carry out transactions for a commission.

The entirety of the POS business entails that a prospective POS agent works under a service provider, which could be a bank or any other financial company.

The POS agent carries out transactions: from making deposits into a customer’s account to enrolling for a Bank Verification Number(BVN) and making transfers.

The POS machine’s GPRS network then connects to the service provider to approve the transaction, which would incur bank charges and a transactional fee once it is obtained.

The POS agent either takes a commission from the transactional charge or receives a commission from his service provider directly.

How Lucrative The POS Business Is In Nigeria

Unlike several other businesses like marketing and advertising, consulting businesses, etc, starting a POS business does not need any educational qualifications.

Because of this, it is quite easy to start, and the lack of educational qualifications as a criterion for starting does nothing to the possible rate of making a profit, which is relatively high.

Considering the number of POS stands and centers around the country of Nigeria, it is safe to say that the POS business is one of the most lucrative, ‘no qualification’ businesses in the country, based on profit-making statistics.

How do we know this?

I asked several shop owners who either own POS stands or run POS services in their various shops and places of business how much they made on bad business days from POS services; two of them said at least N5000 on an average, and four said an average of N7000 and six of them mentioned N10,000 as the least amount made in a day.

Despite the ease in making a profit, there are however a couple of requirements and guidelines to follow to start up a POS business and stay successful in a market with a large number of POS vendors.

Picture of a POS MAchine with black credit card on a wooden table

In this article, I will be telling you about these requirements, what being a POS vendor entails, what to look out for when drawing a business plan, steps to take before fully starting up, and how to make a profit from POS businesses.

How To Start A POS Business In Nigeria

Starting a POS business in Nigeria is relatively easy and involves the following steps:

  • Raise required capital for rent, startup fund, and equipment, i.e POS machine(s), card readers, etc.
  • Get a POS license by fulfilling requirements/submitting official documents
  • Find a suitable location
  • Create branding/marketing material(banners, suitable staff)

You would also need to have an existing business or a job to earn a steady income, which would form the well from which funds for the POS transactions will be drawn.

With that said, let’s get into the details of each of the steps on the list.

Getting Enough Capital

One of the best parts of starting a POS business is that you don’t need an obscene amount of capital to start up; any amount from N50,000 to N300,000 is enough to start(for getting your materials and for your startup fund).

A startup fund is an amount of cash you have on standby for the various transactions you will be carrying out, especially withdrawals.

Getting funds to use for capital could be done in several ways, one of which is taking loans from financial institutions, preferably from the bank that serves as your service provider.

You can also seek investors, people that would contribute to the business, for returns and profit from their investment.

Applying To Financial Institutions

When you are certain you have enough capital, the next step is to send in applications for agent banking to the service provider of your choice.

Applications usually take from between 2 weeks to a month to be vetted and confirmed, which in my opinion is enough time to get every other thing ready(i.e the location, POS work stationery, staff if necessary, etc).

POS Agent Service Providers In Nigeria

Nigeria has several financial organizations and companies that serve as service providers for POS agents, some of which include banks like:

  • Firstbank of Nigeria
  • Wema Bank
  • Zenith Bank
  • Access Bank
  • Polaris Bank
  • Ecobank
  • UBA, among others.

Other financial companies include:

  • Paga
  • Flutterwave
  • Opay
  • Quickteller
  • Baxibox
  • Palmpay
  • Nombre(formerly Kudi) bank

Fulfilling Official Requirements

As mentioned earlier, there are several official requirements needed to be fulfilled to get your application for a POS license approved.

One of these is having your POS business registered with the Corporate Affairs Commission as a corporate society, a sole proprietorship, a partnership, or a public entity.

Doing this would provide you with a CAC certificate, a document that officially proves that you are a certified POS business owner, which you are required to present to your service provider.

You would need to also make sure your shop’s location and the capital for your business is settled, as these are crucial factors to the success of your business.

The service providers would also require your Bank Verification Number and your account references, which would be easier to access/provide if you already have an account with these service providers.

Some may deem it unimportant, but every POS agent should have a Tax Identification Number(TIN) which would serve as tax identification of your POS business, or else it would be counted as illegal.

Other documents you would be required to present include:

  • A valid means of identification; a voter’s card, driver’s license, international passport, or a National Identity card
  • A Credit Bureau report from the Credit Bureau office with two current account references
  • Passport photographs of whatever number is requested
  • An Article of Association.

After your credentials have been cleared and the POS business fully registered, the service provider will make provision for a POS machine and card reader to be handed over to you, on a lease, on rent, bought, or even free.

Getting A Good Location

Woman in Shop close to POS Machine

If possible, before applying to the service providers, you should make sure you have secured a good and strategic area to set up shop in.

A suitable location to set up shop should cover the aspects of good network coverage, unsaturation, and security properly.

Industrialized Areas

When looking out for the perfect spot to set up your POS shop, you will need to consider the industrialization of the area; the area should be busy or at least relatably busy at most, if not all the time.

This could be at a busy junction, or in a plaza that contains a couple of other businesses or shops.

Network Coverage

Several times, I have made transactions with some POS vendors and got a debit from my bank that was never reflected in the account of the agent.

More often than not, network problems mean faulty transactions, and this leads to a reduction in the flow of customers; you would lose customers, and lose profit.

To avoid this issue, locate a place with good or fair network coverage, and always make certain your machines have an available network before a transaction, to be more professional.

Little / No Competition

With the number of POS vendors in various regions of the country, there’s little to nothing you as a POS startup have to offer, so you would need to stick closer to guidelines and professionalism so you can stand out.

Situate yourself in a busy environment that does not have a lot of POS vendors in comparison to others, maybe two or three.

There shouldn’t be any banks or financial companies near your shop; although I see a lot of POS vendors around banks and financial houses, so this does not mean it’s wrong to be located close to banks.

It does mean that however you handle your transactions should be with professionalism.

This means your job would be to convince your customers that it is easier and less stressful to transact with you, with similar results, than going to form or join queues at the bank.


The safety of your POS business is crucial, do not locate yourself in an area that is notoriously known for crime.

Locating yourself in a high-crime-rated environment would lead to your falling victim to constant robberies, vandalism, and the likes, and would put a huge dent in your profit making; you would lose a lot.

Setting Up / Creating Branding Material

Owning a banner/signpost is important for your POS business, as this serves as a flag/beacon to customers around.

The only way to let anyone know there is a POS vendor at a particular place is to indicate its presence(name, address, and POS services rendered)on a banner or signpost.

Your final task would be to hire suitable staff, especially if you are to be engaged with other things, most likely your main job or business.

Make sure to do background checks on the person/people you want to hire, to be sure they are reliable and trustworthy enough to carry out transactions in your absence/without your supervision.

Your workers are an extension/reflection of you and your POS business, so take great care in selecting the right person/people to run your POS business, to avoid a shady reputation.

How Do POS Agents Make Money?

POS agents make profits from the charge fees gotten at the end of every transaction, paid from the customer to those POS agents.

The rates would differ depending on your location; some agents may rake in from N5,000 to N10,000 in a day if they are in suburban and rural areas, and other vendors may bring in up to N20,000 daily if they are situated in a busy metropolis.

Rates could be from N50 to N100 for every N5,000 or N10,000 or more, like I said, depending on your location and target audience; with students, you would have to use a lower charge rate than with market women, seeing as students have less to spend with.

Some POS agents however decide to collect commission from their agent banks and service providers instead of charging the customers themselves directly.

Either way, a particular amount is raked in every day into the wallet of the POS agent, and, seeing as POS businesses do not need corporate advertising and publicity, besides their banners and signs, expenses are less and profit can be made easily.

A plus side to making profits in the POS business is that you can always count on customer traffic; there would always be someone who would not want to go all the way to a bank or ATM to queue so he can withdraw some money or pay bills.

In Summary

Starting a POS business, however simple it may be, involves business capital, submitting official documents and certificates, finding a suitable location, and hiring the right staff to represent your POS brand.

Once you have everything up and running, the POS business is guaranteed to attract stable cash flow as the demand for financial services is ever-growing in Nigeria.

I hope this has been helpful to you in starting your own POS business, and if it has, do recommend/share this article to anyone you think would need it.

Thank you.

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