In this article, I am going to show you how to start a POS business in Nigeria, and it is going to be a step-by-step guide.
POS acronym for Points Of Sale, is one of the biggest fast-rising legit businesses to start in Nigeria since it began in 2013 and will continue to be as we are approaching 2022 and beyond.
Even if a POS business is situated in a community where several banks are located, the POS business will still be profitable because people have long since been fed up with cueing in banks to perform their money transactions via the counter or ATM machine.
For that reason, starting a POS business in Nigeria will continue to be profitable for anyone anywhere in the country.
POS business is also called Agent Banking business; and it is a kind of extension service offered by banking institutions, to enable people to gain access to transact their funds in any form available.
Running a POS business does not only involve transaction of funds; as you can also offer services like selling airtime, and making bill payments for DSTV, GOTV, Startimes, PHCN, and several other utility bills.
Thus, a POS business is capable of helping Nigerians; who are currently facing a high level of unemployment, to earn a living.
Most especially as it does not involve being directly employed by a Bank, so long as you have all the necessary requirements you are going to discover in this article, you can start a POS business in Nigeria come 2022 and beyond.
A short history of the POS business.
The POS business a.k.a Agent Banking business started in 2013, soon after the Central Bank of Nigeria (CBN) made available, its guidelines on how to operate and manage the business.
Ever since the POS business has continued to be a retail channel for several commercial banks in Nigeria to make their banking services available to their customers; especially in the remote parts of the country where there are no banks or ATM machines.
The banks provide banking equipment for their agents which includes: POS machines, card readers, mobile phones, barcode scanners, PIN pads, computers, etc.
These agents are not limited to a particular bank, as they can also be agents to as many banks as they can serve.
The banking agent must, however, have a retail outlet where he or she can conduct financial transactions which enable clients to deposit, withdraw, transfer money, pay utility bills, recharge their phones, check their account balances, and several other related services.
How to start a POS business in Nigeria.
Most people are made to believe that POS business cannot thrive in areas where there are very many banks, as well as ATM machines outlets where people can zoom in at any given time to perform their financial transactions.
But considering the fact that people are getting tired of having to cue in banks or ATM layouts, as they can walk into a POS shop and perform their money transactions within a few minutes.
Another factor to consider is the opening and closing hours, as well as working days for banking sectors.
Banks usually open by 8 am and close by 4 pm from Monday to Friday. And on Saturdays and Sundays, they do not operate at all.
Thus, people who have the need of making money transactions during those hours and days the banks do not operate will definitely settle for a POS service.
So before you think of starting a POS business in Nigeria, make sure you study and implement the following steps I am going to reveal in this article:
- Step 1: Register Your Business.
- Step 2: Open An Account With Your Bank Of Choice.
- Step 3. Get Requirement Details From Your Bank Of Choice.
- Step 4. Get Tools And Equipment For POS Business.
- Step 5. Rent A Shop Or Space For Your POS Business.
- Step 6. Advertise Your POS Business.
Step 1: Register Your Business.
Running a POS business usually involves getting access to people’s finances, and for that reason, care is taken to ensure that a POS agent is not someone who is going to run away with people’s money at the end of the day.
And for that reason, commercial banks require that one willing to act as a Bank Agent must have to register their business with the Corporate Affairs Commission (CAC).
So, therefore, the first step you must take toward becoming a POS or banking agent is to register your business under any of the following entities:
- Sole Proprietorship
- Limited Liability Company
- Cooperative Societies.
- Public Entities etc
Once you register your business with CAC, the next thing you must do is open an account with a bank f your choice, that’s if you don’t have one at the moment.
Step 2: Open An Account With Your Bank Of Choice.
Any of the commercial banks you will be acting as an agent for will require you to have an account that will enable you to make a direct deposit for financial transactions.
For instance, if people want to deposit money into their accounts; you will have to transfer the needed amount from your bank account to the client’s bank account.
This means you will collect the money cash at hand and afterward deposit it back into your account.
Step 3. Get Requirement Details From Your Bank Of Choice.
All you have to do in this step is to approach any bank you want to use for your POS business and get their required details.
CBN guides allow individuals to be an agent for as many banks as they can.
So you must go to your choice banks to get a form and fill out some documents and agreements.
Afterward, the bank will review your application and if it aligns with the CBN guidelines, they will enter into an agreement with you.
Some of the requirements usually include:
- Valid identification details e.g Drivers license, voters card, National ID card, international passport, etc.
- 2 recent passport photographs.
- 2 current account references.
- CAC certificate i.e evidence of your business registration.
- Tax identification number (TIN).
- Memorandum and article of association
- Credit bureau report.
- A minimum capital deposit of at least 50,000 Naira.
Step 4. Get Tools And Equipment For POS Business.
Once your bank of choice approves your application, they will supply you with the needed tools and equipment for the POS business.
The tools and equipment are often a POS machine, card reader, and barcode scanner to scan bills for bill payment transactions.
Step 5. Rent A Shop Or Space For Your POS Business.
It doesn’t necessarily need to be a shop as you can also construct a shed for your POS business, but before you make a decision here the 2 most important things you need to consider for your shop are the location and security.
Location: You need to ensure that you chose a busy location for your POS shop or shed.
Even if it’s close to bank premises or ATM machine dispensers, customers who will face disappointments in the banks and ATMs are going to patronize you.
Another factor to consider for your shop shed is how comfortable it is for customers.
This means you must have adequate space to accommodate your customers, and above all make them feel comfortable when they visit your place.
For that reason, when you are thinking of using a shed for your POS business consider how customers will feel when they come there.
For instance, during rainy days, will your shed be comfortable enough to accommodate whatever number of customers are present at the moment?
Security: another important factor to consider is how secure your location will be.
You need to consider if your location will be easy for bandits to rob you and get away with it.
Moreover, you need a safe to keep your money. So think of ways you are going to make your shop safe for both yourself, workers, and customers.
Step 6. Advertise Your POS Business.
The last but not the least step you need to take is to advertise your POS business.
The popular means of advertising the POS business is putting up a flex in front of the POS shop.
But why not take your own advert strategy a bit higher, like print flyers and complimentary cards you will give to every single customer that enters your POS shop.
You can also print and paste posters in strategic locations a few meters away from your POS shoo, in order to alert people that a POS shop is close by.
Another strategy is using your social media platforms to create awareness for your POS business.
Above all else be mindful of your relationship with your customers.
Even if they are rude to you don’t reciprocate, rather a little word of kindness will go a long way to calm that new and arrogant customer and keep him as your personal customer at all times.
Ensure that your customers leave your shop satisfied and smiling at all times, and that will definitely make them come back again and again.
- Related article: What Business Can You Start With 50k In Nigeria?