How to Start a POS Business in Nigeria

Who is this article on how to start a POS business for? It is for Nigerians with small capital, job seekers, hustlers looking for fast daily income

Table of Contents

The POS (Point of Sale) business has become one of the most popular and profitable ventures in Nigeria today. With a small startup capital, you can start earning daily by helping people withdraw cash, send money, and pay bills in your area.

If you’ve ever thought, “How do I start a POS business in Nigeria?” then this” guide will walk you through everything step by step.

Why Start a POS Business?

Is it not true that POS has come to your aid at one point or the other during your regular day to day activity? That explain the reasons why you should give some thought to owning one if you need a side income source.

Here are some more reasons why you should:

High demand: Many areas don’t have enough banks or ATMs, so people rely on POS agents.
Fast daily cash: You can start earning from your first day.
Low startup cost: You don’t need millions to start.
Flexible: You can run it full-time or as a side hustle.

What You Need to Start a POS Business

Startup Capital
- You need ₦100,000–₦250,000 to start.
- This covers your POS machine, branding (umbrella, chair, signage), and float (the cash you’ll use to service customers).
Get a POS Machine
- You can get a POS terminal from banks or fintech companies like
  - Moniepoint
  - Opay
  - Palmpay
  - Baxi
  - Kuda (for agents)
  - First Bank, Zenith, Access (some major banks)
- Each provider has different requirements, but most will ask for:
  - A valid ID (NIN, Voter’s Card, Driver’s License)
  - BVN
  - Utility bill or proof of address
  - Passport photo
Choose a Good Location
- High-traffic areas like
  - Bus stops
  - Busy junctions
  - Inside markets
  - Near schools or residential estates
Float (Working Capital)
- You’ll need ₦50,000–₦100,000 minimum to start servicing transactions.
- Float is the cash in your wallet or account to give to customers who want to withdraw and the bank balance to send money.
Basic Setup
- Get a chair and umbrella (especially during rainy season).
- A small table or kiosk is also helpful.
- Branded signs with your service list attract customers.
If you are serous on this type of business, it is advised that you register your business.

How POS Agents Make Money

You make money by charging a small fee on every transaction.

Withdrawals: ₦100–₦300 per transaction, depending on the amount.
Deposits/Transfers: ₦50–₦200
Bill payments (Airtime, DSTV, NEPA): You earn commission.

Example Daily Earnings:

50 withdrawals at ₦100 = ₦5,000
20 transfers at ₦50 = ₦1,000
👉 That’s ₦6,000 daily = ₦180,000/month (before expenses)

Risks and How to Manage Them in POS Business

At this stage, you have everything you need to start a profitable POS business in Nigeria. But there are risks you must be aware of.

While the POS business is promising, it comes with its own set of challenges. Being aware of these potential pitfalls and having proactive strategies in place is what will help you have long-term success and peace of mind.

Here’s a closer look at some key risks and actionable steps you can take to manage them:

1. How to Guard Against Fraudulent Customers:

Dishonest individuals will attempt various fraudulent activities, such as using stolen cards, initiating chargebacks on legitimate transactions, or employing other deceptive tactics.

Your Strategy: While “always double-check every transaction” is a good basic principle, let’s elaborate:
- Implement Thorough Verification: Go beyond a quick glance at the card. Verify the cardholder’s identity when possible (e.g., request a valid ID for large transactions).
- Be Vigilant for Suspicious Behavior: Train yourself and any staff to recognize red flags, such as rushed transactions, reluctance to provide identification, or inconsistencies in card details.
- Leverage Technology: Use POS terminals that offer features like transaction alerts and detailed reporting.
- Consider integrating with fraud detection services if your transaction volume warrants it.
- Maintain Detailed Records: Keep accurate records of all transactions, including timestamps, amounts, and any identifying information collected. This will come in handy in resolving disputes.
- Stay Updated on Common Scams: Fraudulent methods pop up almost every everyday, so stay informed about the latest POS-related scams in Nigeria through industry news and forums.

2. How to Mitigate the Threat of Robbery or Theft:

As a business handling cash, POS operations are usually a target for criminal activity.

Your Strategy: “Operating in a secure, well-lit area” is a fundamental step. Let’s build on this for a second:
- Strategic Location Selection: Choose locations with good visibility, decent foot traffic (but not necessarily isolated spots), and ideally some level of security presence (e.g., near other businesses or security personnel).
- Enhance Physical Security: Consider measures like installing security cameras (CCTV), using secure cash boxes or safes, and potentially employing security personnel, especially during peak hours or in higher-risk areas.
- Minimize Cash Holdings: Avoid keeping large amounts of cash on hand. Make frequent deposits or utilize mobile money transfer options to reduce your vulnerability.
- Establish Clear Protocols: Develop and communicate clear safety protocols for handling cash and responding to potential threats. Train yourself and any staff on these procedures.
- Insurance Coverage: Explore insurance options that cover theft and robbery to provide financial protection in case of an incident.

3. How to Overcome Network Challenges:

Unreliable network connectivity can lead to transaction failures, customer frustration, and ultimately, loss of business.

Your Strategy: “Use a provider with strong uptime and fast transactions,” is essential. Let’s delve deeper:
- Research and Compare Providers: Don’t settle for the first option. Investigate different mobile network providers known for their reliability and coverage in your operating areas. Check their uptime records and customer reviews.
- Utilize Multiple SIM Cards/Networks: Consider using POS terminals that support multiple SIM cards from different providers. This provides redundancy in case one network experiences issues.
- Explore Wired Connections (If Feasible): If your business operates from a fixed location with reliable internet access, explore POS systems that can utilize wired connections as a more stable alternative.
- Have Backup Plans: In case of network outages, have a contingency plan. This could involve manual transaction recording (with caution and clear communication to the customer) or temporarily suspending services.
- Regularly Test Connectivity: Periodically check the network connectivity of your POS terminal to identify potential issues before they impact customers.

Tip: Don’t put all your float in one account. Use two phones/accounts to manage better.

Tips to Grow Your POS Business

Strategies for Expansion and How to Take Your POS Business to the Next Level

Beyond providing reliable service, strategic growth is what you need to maximize your potential in the POS business.

I will show you some actionable tips to help you expand your operations and increase your earnings:

1. Cultivate Positive Customer Relationships:

The Foundation: “Be polite and trustworthy: Customers love friendly agents” is absolutely right. Happy customers are repeat customers and your best advocates.
Expanding the Idea:
- Exceptional Customer Service: Go the extra mile. Be patient and helpful, and address any issues promptly and professionally.
- Build Rapport: Remember regular customers and their preferences. A little personal touch can go a long way in building loyalty.
- Active Listening: Pay attention to customer feedback and use it to improve your services.
- Handle Complaints Gracefully: When issues arise, address them calmly and fairly to maintain customer trust.

2. Ensure Reliability and Accessibility:

The Cornerstone: “Stay consistent: Open daily and on time” builds trust and ensures you’re available when customers need you.
Further Development:
- Communicate Operating Hours Clearly: Make sure your operating hours are clearly visible at your location and, if applicable, on any promotional materials.
- Minimize Downtime: Address any technical issues or power outages swiftly to avoid disrupting service.
- Consider Strategic Location(s): If you expand, choose locations with high foot traffic and limited access to other POS agents.

3. Diversify Your Revenue Streams:

Boosting Income: “Offer extras: Sell airtime, snacks, or cold drinks to increase income” is a smart way to leverage your existing customer base and location.
Exploring Further Options:
- Bill Payments: Offer services for paying utility bills, cable TV subscriptions, and other common expenses.
- Mobile Money Transfers: Facilitate sending and receiving mobile money, which is a popular service in Nigeria.
- Small Loans/Cash Advance Services (with caution): If regulations allow and you have the capital, offering small, short-term loans could be a significant revenue generator but requires careful management and risk assessment.
- Partnerships: Collaborate with local businesses to offer bundled services or promotions.

4. Strategic Reinvestment and Expansion:

Planning for Growth: “Reinvest: Gradually expand to new locations or buy a second POS machine” is crucial for scaling your business.
Developing a Growth Strategy:
- Phased Expansion: Don’t rush into opening multiple locations at once. Start with one additional machine or a new strategic location and learn from the experience.
- Market Research: Before expanding, research potential new locations to assess demand and competition.
- Network with Other Agents: Learn from the experiences of other successful POS business owners.
- Consider Hiring (Eventually): As you expand, you might need to hire trustworthy staff to manage additional locations or machines.
- Explore Agent Networks: Some POS service providers have agent networks that can offer support and potentially new opportunities.

Is POS Business Still Profitable?

YES! But only in areas where demand is still high and competition is low.

Do a quick survey of your area. If you still see long queues at ATMs or few agents, then it’s a goldmine waiting.
Echez O’ Ford

Pro Tip: If you can partner with a shop (e.g., provision store or pharmacy), you may not even need to rent a space. Just share profit or pay small monthly rent.

5 popular and reliable providers in Nigeria:

Provider	Strengths	Website
Moniepoint	Widely trusted, stable terminals	moniepoint.com
Opay	Fast transactions, easy onboarding	opay.ng
Palmpay	Good commission rates	palmpay.com
Baxi	Offers bills & airtime services	baxibox.com
MTN Momo	Trusted brand, good support	momopay.mtn.ng