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POS Business: How To Start POS Business In Nigeria [Ultimate Guide]


    how to start pos business in nigeria

    How To Start POS Business In Nigeria

    If you are looking for a Profitable Business you can start with 50k to 100k in Nigeria, then this article will surely give you ideas and everything you need to know about becoming a POS (Point of Sale) agent in Nigeria.

    A POS business or mobile cash agent is someone who gives cash to customers in exchange for a commission or charge using a POS system. The Nigerian POS business is currently one of the most active enterprises that an ordinary individual may start.


    Due to the unavailability of ATMs and long lines, the POS initiative is gradually replacing ATMs because it provides clients with simplicity and convenience.

    In this article, MyStudyExtra has put out some ideas and information you need to know about Starting up a POS business in Nigeria, how to become a POS Agent/operator, why you should start a POS business in Nigeria, Requirements, the Best location for POS Business and how much you could make a month as a POS agent.

    Overview of POS Business In Nigeria

    The Central Bank of Nigeria (CBN) developed the Agent Banking system, also known as the Point of Sale (PoS) system today, in 2013, and it has since been a go-to medium for numerous financial transactions.

    A POS firm primarily supports retail sales transactions, with services such as cash transfer and withdrawal, airtime sales, bill payments for satellite TV providers such as DSTV, GOTV, and Startimes, as well as the purchase of power units (PHCN) and other utility bills.

    Outlets can be found throughout the country, especially in places where goods and services are sold or delivered, such as marketplaces, shopping centers, fuel/gas stations, restaurants, offices, pharmacies, and so on.

    It is important to note that a PoS agent is not an employee of the bank but is an independent contractor with a service provider, which is usually a bank or financial technology firm.

    Operating a POS terminal is a legitimate and profitable business people can start with little capital in Nigeria. To start, there are factors to be considered to ensure the smooth kickoff and operation of the business.

    Also Read: Top 15 Online Jobs For Students in Nigeria [That Pays Well]

    Here are Reasons Why The POS Business Is A Viable Business

    The viability of the POS business in Nigeria has been proven time and time again, with the results of how well this venture has done being out there for all to see.

    In a country like Nigeria, where most retail businesses can’t access electronic payments, consumers resort to carrying cash around, even when most of them would prefer to go cashless.

    However, since the introduction of the POS business, not only can customers pay how they prefer, but with ATM spaces being crowded, people can just walk to a nearby agent to get cash within minutes.

    POS or Agent banking services have become Nigeria’s mainstay of financial transactions. Below are some reasons why this business is lucrative for millions of people in Nigeria.

    1. The low number of functioning ATMs in the country causes long queues.

    2. Poor network connections at ATM points and banking halls have made many customers find alternative ways to perform monetary transactions.

    3. The POS business also helps consumers withdraw money easily when the closest ATMs in their area are far from them.

    4. Most people don’t know they can, or how to pay utility bills with their banking apps, so they’ll always look for POS agents to do this for them.

    5. It is a simple business that doesn’t require much capital or furnishing of a shop. With an umbrella, chair, and table, you can start up this business.

    6. There is a limitless number of people who perform numerous transactions every day in marketplaces, streets, motor parks, etc. So, you won’t be looking for customers, they’ll come to you.

    how profitable is pos business

    Services Offered By POS Business Agents

    As a POS business agent, you’ll be approached by customers to assist them with a lot of banking activities.

    These are some of the services offered by POS business agents, you can provide for your clients too:

    • Funds withdrawal from a bank account.
    • Opening of a bank account.
    • Depositing funds.
    • Payment of electricity, TV subscription, airtime, and other bills.
    • Transfer of funds.
    • BVN (Bank Verification Number) enrollment.


    How To Start POS Business In Nigeria

    To become a mobile money agent or start a POS business, here is the step-by-step process on how to start a POS business in Nigeria

    1. Find Out The Cost Of Starting the Business

    The first thing you should do is determine the cost of starting a POS business in Nigeria and your area. This is because costs differ from person to person, and by location too.

    The amount you will pay as rent for a shop or a space in Ibadan will be different from what you will pay if you were operating in Osun state.

    You’ll also need to know which bank or company you’ll be signing up with as an agent. Does the organization give you a free POS machine or will you pay for it? Will you incur costs for their requirements?

    Put into consideration your shop as well. How will it be? Do you need to get safe to secure your properties? These are some of the things to think about first to get the total cost of starting your business.

    2. Register Your Business Name

    While this step may not be a necessary one for everybody starting a POS business in Nigeria, some banks have it as part of their requirements, so might need to get this step done before applying to become an agent.

    However, if what you want to do is to add the POS venture to an existing business or you have another way of getting a POS machine, then registering your business name is not compulsory.

    3. Get A Suitable Location

    Since your business isn’t virtual or involves moving around, you’ll need to get a location that is densely populated. This place should house lots of people and be difficult to access banks or ATMs from.

    4. Create Your POS Business Plan

    Creating a business plan might not be a necessity, but it’ll help you stay on track with your venture.

    The plan should detail your aims and objectives. There you’ll also put down an estimate of how much it’ll cost you to start your POS business.

    5. Get Capital

    After determining the cost of starting your POS business, and getting a set figure, your next move should be finding a way to raise the capital. Do this, and you’ll be well on your way to becoming a POS agent.

    6. Apply To Become An Agent

    Based on the bank or financial institution you’re applying to as an agent or for a POS machine, you may need to purchase one outrightly, get it on a lease, or for free.

    Decide which one is suitable for you based on the organization’s requirements, commissions, and charges.

    You can either apply for a POS machine online or go to the bank or company’s office. However, this process can take up to 2 weeks to a month for everything to be ready.

    7. Get A POS Machine

    A POS machine can be gotten from a commercial bank in Nigeria, and also from a few microfinance or Fintech banks.

    When choosing a POS service provider, below are a few things to note:

    • The network or service
    • Cost of the POS machine
    • Charges for the transaction:
    • Few POS service providers charge 0.65% and ₦10 for transactions lower than ₦10,000.
    • Transactions above ₦10,000 cost ₦50.

    Although some banks only charge a fee of ₦10 for any type of transaction.

    Ensure that you compare the charges of other POS service providers before you choose the one you want.

    ALSO READ: Top 12 Best Bank For POS Business In Nigeria [No.8 Is the Cheapest]

    Requirements For POS Business

    To successfully start up your POS business in Nigeria and beat the competition, you’ll need to get some items ready and follow some guidelines.

    The following are the requirements for a POS business:

    1. Capital

    As we mentioned earlier, you’ll need to find out how much it would cost to kickstart your POS business.

    As earlier mentioned, the capital needed for the POS business is not expensive because you don’t need a lot to start the business.

    2. Get A Good Location

    A good location is important when building a POS business. This is because if you’re positioned somewhere strategic, you’ll have a lot of people patronizing you.

    Later in this article, we’ll discuss extensively how to choose a good location for your POS business.

    3. Official Requirements

    The Central Bank of Nigeria (CBN) has some set requirements POS agents must meet before they are approved by any financial organization.

    To get a detailed list of all those things, you can either visit a bank or contact the customer care of any of the banks you chose.

    Keep in mind that while the CBN permits POS agents to work with any POS service provider, the documents you’ll be required to submit might differ by provider.

    Here is a list of some of those documents:

    • A valid means of identification like a National ID Card, Voter’s ID Card, etc.
    • 2 Passport photographs.
    • Your Bank Verification Number (BVN).
    • 2 Current Account references.
    • Evidence of business registration (CAC Certification).
    • Startup funds/capital minimum of NGN50,000.
    • Tax Identification Number (TIN).
    • A Memorandum and Article of Association.
    • Credit Bureau Report.

    After your application has been approved by a bank, you will receive a POS machine, which is either free or comes with a cautionary fee attached, so that you can start your POS business.

    how to start a pos business in nigeria

    Best Location For POS Business

    Finding and paying for the best location for your POS business is one of the most helpful things you can do for your venture. Additionally, a great location, assures large sales and profits.

    This setup is among the most important things you must think about before you start running this business.

    You know you have a strategic location when it is a place that is frequented by a large number of people that constantly need to perform monetary transactions.

    Some places like this include – remote settings, student areas, markets, and places that are far from where banks and automated teller machines (ATMs) can be accessed by people.

    Besides snagging a busy place to set up shop, these are some more factors to consider before you can choose a good location for your POS business:

    1. Network: A poor network connection can be a major turn-off for people when they go to patronize an agent, especially if they need cash badly.

    Operating your POS business in a place with a good network or service will guarantee that you smoothly perform all your transactions and not disappoint your customers.

    Similarly, a location with a poor network connection, will give you a lot of trouble and put you in frustrating situations. If a customer visits your stand and discovers that you don’t usually have a good network, they might not visit your shop again. Unless of course, you’re the only POS agent in that area.

    2. Security: A POS business brings in a lot of cash, and you’ll be handling all that money. This makes your POS outlet an easy target for shoplifters, petty thieves, and even armed robbers.

    That is why, before you choose an area or start paying for a shop, do thorough research on the neighborhood or area by asking around so that you can determine the theft/ crime rate.

    3. Competition: If they’re more than two POS agents in the location you want to operate in, then you should do yourself a favor and find somewhere else where the competition is low.

    This is because most people will already be familiar with those other outlets and may not be willing to patronize your shop in large numbers unless your competitors are indisposed for the day.

    4. Other Factors: There are other factors too to consider before choosing a location for your POS business.

    These are some of them:

    • The population of people in the area.
    • Demography of people in the area (students and office workers make for good customers as they frequently use the POS).
    • Close to banks – many people will not opt for a bank and incur high charges for withdrawn money when they can do it at a bank 10 minutes away for a lower or no price.

    How do POS Agents Make Money? 

    POS Agents Make profits from service charges they collect per transaction from a customer.

    For example, if a customer comes to withdraw N5,000, you’ll charge N100 for the transaction and share it with the POS Provider. You take N60 as your commission, and the bank or company will take N40.

    This money will be earned from every customer that uses your POS for a transaction and some customers can do multiple transactions at a go, which means more money for you.

    When you get a suitable location and earn the trust of the locals, you can make as much as an average of ₦7,000-₦10,000 daily.

    How to Become a POS Agent?

    Becoming a POS agent is not a hard feat to achieve, all you need to do is get approved by the terminal you choose to work with. Next is to pick a good location and you can start earning income as a POS agent.

    How Much Does It Cost To Start a POS Business?

    How much do I need to start up a POS business in Nigeria? can I start a POS business with 20k or 50k? These and many more questions fill the minds of those seeking to start a POS business.

    Well, there is no fixed amount for how much can be used to start a POS business, however, this doesn’t mean that you shouldn’t set aside a substantial amount for getting a shop, a POS machine, and for performing daily transactions too.

    This is a breakdown of things that might require you to spend money when starting your POS venture.

    1. Shop:

    The shop where you’ll open your POS business will be what will determine the amount of money you need for renting a store or kiosk or even an umbrella stand you’ll use as a shade.

    You have to make inquiries and find out how much it’ll cost you to set up the office where you want to operate your POS business from.

    2A POS machine/device:

    The cost of a POS device can range from 30,000 Naira to above 100,000 Naira. This price is dependent on the bank or Fintech company you intend to use as your POS service provider.

    On the other hand, some banks or Fintech companies can charge you 85,000 Naira for a new terminal. But some of them also offer free POS machines, however, you must meet their requirements to receive one.

     3. Available Cash for transactions

    If you want to fulfill your customers’ financial needs, then you must have a large amount of money set aside, especially for performing daily transactions.

    This amount can range from N100,000 to N300,000 on average. This sum should be enough for daily business running.

    There is no particular amount of money you need for starting your POS business. This is because that cost is entirely dependent on if you are renting a shop or not, or if you’re getting the POS terminal for free or not.

    How much can I make from POS business in a month?

    Most POS business agents report that they typically earn N150,000 – N250,000 as profit every month.

    To make this amount in a month depends on the area you operate your business out of. The farther your shop is from the bank or an ATM, the higher the chances of people patronizing you.


    POS business in Nigeria is a lucrative venture anyone can start with minimal capital and make a profit. You just have to follow the right steps and you would be able to earn a decent living from the business.

    We hope our ultimate guide on how to start a POS business in Nigeria helps you achieve your goals of starting one. Feel free to ask questions on the topic if you need further clarification and our experts would be here to assist. Thank you.

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