Are you interested in venturing into the POS Business (Point of Sale) in Nigeria? If so, you’re about to embark on a potentially lucrative journey that can yield impressive profits. In this comprehensive guide, we will not only walk you through the process of starting a POS business in Nigeria but also reveal strategies to diversify your income streams and maximize your earnings. Additionally, we’ll discuss the capital requirements for launching your venture and the Nigerian banks that offer POS business services. So, let’s dive in and explore the promising world of POS entrepreneurship.
Understanding POS: More Than Just Payments
While many Nigerians are familiar with Point of Sale (POS) machines as tools for making payments at shopping malls and supermarkets, the capabilities of these devices have evolved significantly. Initially constrained by regulations, particularly those imposed by the Central Bank of Nigeria (CBN), POS machines now offer a plethora of services that eliminate the need for frequent bank visits.
Today, a POS machine can facilitate various transactions, including depositing and withdrawing money, paying utility bills such as NEPA, purchasing airtime, subscribing to GoTV or DSTV, and even acquiring internet subscriptions. Nevertheless, the most common use remains cash withdrawals.
Is POS Business Profitable?
The million-naira question for aspiring POS entrepreneurs is whether the business is truly profitable. Well, the answer is a resounding “yes.” Depending on factors such as your location and the services you offer, you can earn anywhere from ₦15,000 to ₦50,000 per day solely from providing POS services. Imagine the potential when you combine this with other businesses like phone charging or selling phone accessories.
With the right approach, you could be making an average of ₦50,000 to ₦100,000 daily. As a POS agent, you typically earn a commission on each transaction, and these commissions can add up quickly. For instance, in many areas, POS agents charge ₦100 for every ₦5,000 withdrawn or deposited. If you serve 50 customers a day with similar transactions, you’d earn ₦5,000 in profit.
Capital Needed to Start a POS Business
The capital required to kickstart your POS business in Nigeria hinges on the choice of bank you partner with and the bank’s classification, whether commercial or microfinance. The good news is that you can establish a POS business with nearly any bank or fintech provider in Nigeria. The capital threshold typically starts at ₦400,000, which must be deposited into your merchant account to commence operations.
How to Start a POS Business in Nigeria: Step by Step
- Secure the Required Capital: As previously mentioned, your journey begins with gathering the necessary capital. Avoid the temptation to acquire loans for business startup, as it’s essential to minimize financial risks. If you lack sufficient funds, consider starting a low-capital business first and expanding into POS when you’ve saved enough.
- Acquire the POS Machine: Your next step is procuring a POS machine. These devices are distributed by both microfinance and commercial banks, so you can approach the bank of your choice to obtain one. Nearly all major banks offer POS machines, but you should carefully evaluate each bank’s offerings and requirements. Depending on the bank, you may need to link your existing account to the POS machine or open a new one.
- Master the Machine: While POS machines are user-friendly, it’s crucial to become proficient in operating them to avoid errors during transactions. Start by practicing with family and friends, as they will be more forgiving of any mistakes. Begin by learning how to handle deposits and withdrawals, as these are the most common transactions conducted at POS centers.
- Choose the Right Location: Location is a pivotal factor in your POS business’s success. If you’re not operating from home, selecting the optimal site is imperative. You don’t necessarily need to rent a physical shop, especially if you plan to focus solely on your POS business. High-traffic areas such as bus stops, T-junctions, and roundabouts can be excellent choices, as they attract a steady stream of potential customers.
- Initiate Withdrawals and Deposits: One of the advantages of a POS business in Nigeria is its mobility. You can operate from virtually anywhere in the country, eliminating the need for a fixed shop or space. However, it’s essential to maintain meticulous records of your transactions, including the charges collected. Avoid writing down customers’ card details, as this practice can raise suspicions and damage your reputation.
- Maximizing Profits: To significantly boost your earnings, consider hiring an employee to handle transactions, offering them a monthly salary of ₦20,000 to ₦30,000. Expanding your business by opening additional branches can also be a lucrative strategy, further increasing your income. Additionally, extending your operating hours, especially on Sundays, can attract more customers and generate higher profits. Lastly, consider diversifying by launching complementary businesses such as selling phone accessories or offering phone charging services alongside your POS operation.
In conclusion, the POS business represents a highly profitable opportunity in Nigeria, driven by factors like long queues and network issues in traditional banks. The growing demand for convenient financial services, especially among the youth, makes it a viable business venture. By adhering to the steps outlined in this comprehensive guide, you can establish and run a successful POS business in Nigeria, maximizing your income and achieving financial success. So, take the plunge into the world of POS entrepreneurship, and watch your profits soar as you provide essential services to your community.