The POS business could be a very lucrative business if established in the right place and at the right time. If you’re wondering how to start a POS business in Nigeria, I shall guide you in this article as you read on.
POS business is almost the only business that brings the bank to the streets of the people— that is, it makes commercial, financial, and other banking activities easier for the people who live far away from where the official banks are situated. Therefore, the location to establish the POS business in Nigeria is one of the most important things to map out in your plans. I’ll talk more about this as you read on.
Running a POS business, you serve as an agent to the banks to enable easier financial activities to a wide range of customers. Through these POS services you offer to people, they are able to withdraw funds irrespective of the banks they are using, transfer funds irrespective of the banks they’re using, open an account, pay bills like the electric bill, satellite TV bills (DSTV, GOTV, Startimes, etc); recharge their phones (airtime and Internet data) through top-up without having to go through the stress of scratching airtime vouchers.
Running a POS business in Nigeria, you should have these in mind:
- You’re creating a job or a side job for yourself
- You’re helping banks in reaching out to as many customers as possible
- You’re making payments easier for people
- You’re decongesting the crowd in banking halls and possibly reducing the queue in ATM corners
- You bring the bank closer to people’s houses.
Steps on How to Start a POS business in Nigeria.
- Location: This is one of the most important things you must have thought about when deciding to run this business. In this business, you’ll have to find the location where financial activities are scarce and people find it difficult to perform simple financial activities. Rural areas, student environments, markets, barrack areas, and places where banks and ATM points are far from the people can be a perfect location to begin this business.
- Startup Capital: To start a business like this, you need some tangible amount of money to set up. A few hundreds of thousand can be perfect to set up. This will cover your expenses in getting what you need in starting a POS business.
- Get a Shop or Kiosk: This will serve as the local or nearest financial institution to the people where they can perform simple transactions like withdrawal, payment, bank transfer, etc. Your shop or kiosk should be designed in such a manner that it notifies people you’re running a POS business. A small board designed can be put in front of your shop to alert customers from a far distance who are looking for a POS terminal.
- Get the POS Machine: This is also one of the most important tasks of the business. It is a daunting task and yet it marks the beginning of your business. Basically, there are two ways of getting a POS machine; through official banks and or other finance agents. The cost of acquiring the POS machine may also cost a few hundreds of thousands depending on how strong or advanced the connection runs. Getting your POS machine through a bank, there are some criteria you have to meet in accordance with the CBN directives. However, whichever bank you want to approach to begin this business, it is advantageous for you to have an active account with them.
Basic Requirements for Obtaining a POS Machine from the Bank
- A valid means of identification: A National ID card, voters card, active driver’s license or an international passport.
- A registered business name
- A POS location
- Passport photographs
- Account number
- Phone number
- Email address ( business mail address)
- and other important documents.
List of Banks issuing POS machines for business purposes
- First Bank
- United Bank for Africa
- Guaranty Trust Bank
- Diamond Access Bank
- Zenith Bank
- Wema Bank
- Keystone Bank
- Fidelity Bank
- Union Bank, etc.
If you would visit any of these banks, it could be advantageous for you to get a POS machine for free or at a very low cost if you have an active account.
Alternative Places to Obtain a POS Machine
Microfinance banks are a very good option to a obtain POS machines.
Also mobile operators like Interswitch, Quickteller, Paga, FirstMonie, Opay, etc could be your host and you could work as an agent.
Challenges You can face Running a POS Business
- Power Supply: Although the rural communities and places where banks are far from the people might be a perfect place to establish this business, however, these areas may lack a constant power supply to run this business. So a standby generator could solve this challenge for you.
- Security: This is also a factor that is also dependent on the location you decide to establish this business. You may need to stay longer in your shop to run services to potential customers. In areas where hoodlums dominate, especially if you’re new, you might be robbed or even assaulted. So in planning this business, a student area or a more secured area should also be prioritized.
- Network Issues: After you must have successfully established this business, the tech issue you could face is the network issue. So it is important for you to choose a reliable network service provider.
Having talked about this POS Business in Nigeria, you have an idea on how to run it now. If established very well it could lead you to financial freedom and confidence.