The Point of Sale (POS) business in Nigeria has become very lucrative, especially in areas where banking services are scarce or inaccessible. It has little or no barriers to start, and it’s an attractive option for entrepreneurs looking to tap into the growing demand for mobile money banking. If you are considering starting a POS business in Nigeria, here are the requirements, costs, and potential earnings you need to know.

What is a POS Business?

People, regardless of their locations, may need to carry out financial transactions such as withdrawals, deposits, funds transfers, bill payments, airtime, and data recharges. For those in the underbanked or unbanked areas in Nigeria, the POS business provides a platform to carry out these financial transactions seamlessly through the POS terminal or mPOS. The POS business is quite profitable in locations with limited access to traditional banking services where customers can access financial services without visiting a bank.  

Key Requirements for Starting a POS Business

Starting a POS business in Nigeria does not require a lot of upfront investment, but there are key requirements you must meet, and they include;

• Get a Business Location: A strategic location is essential for attracting customers. Your POS business should be situated in high-traffic areas like marketplaces, bus terminals, or near schools because your location determines how many transactions and how much profit you make daily.
• Choose the Agency Banking or Aggregator: You will need to partner with a trusted and reliable agency banking provider like Kashzoo or an aggregator that offers POS terminal services. You can access the necessary devices to operate your POS business through them. 
• Obtain the POS Terminal: Depending on the service provider, you may need to purchase or lease a POS terminal. Some companies may charge a one-time fee, while others, like Kashzoo, offer a lease option, which allows you to return the terminal and get refunded if you decide to stop the business. 

Note: the POS machine must be without wear and tear to get your refund. 

• Get Capital for Transactions: You need enough funds in your account to cover transaction costs. The amount you will need varies depending on the volume of transactions you plan to handle daily.

Cost Breakdown of Starting a POS Business in Nigeria

The cost of starting a POS business in Nigeria can differ depending on the service provider you choose. Here’s an overview of the major costs involved:

• POS Device Costs: Service providers typically charge a one-time fee or lease the terminals under specific conditions.  The cost can range from ₦15,000 to ₦50,000. 
• CAC Registration: You need to register your business with the Corporate Affairs Commission (CAC) in line with the CBN’s requirements. The estimated cost for CAC registration is ₦25,000 to ₦35,000. 
• Start-up Costs: Initial startup costs can range between ₦70,000 to ₦200,000, which includes getting a POS terminal, capital for transactions, and other initial expenses. 
• Cost of Rent or Space: Some locations may cost as little as  ₦1,000 per month, while others may cost more. It all depends on the location in Nigeria. 
• Miscellaneous Costs: You may need a kiosk, an umbrella, power bank, and other essentials to ensure smooth operation. Expect to spend about ₦20,000 to ₦100,000 on miscellaneous costs. 
• Marketing & Branding: Attracting customers with your displayed banner or flyers could cost between ₦5,000 to ₦20,000, depending on how big your marketing efforts are. 

Potential Earnings for a Money Agent

One of the most attractive parts of starting a POS business is its potential profitability. As a POS agent, you will earn a commission on each transaction you process, which ranges from ₦80 to ₦800 per transaction. 

Note that the amount you earn depends on the type and volume of transactions and the service provider.

If you process an average of 50 to 100 transactions daily, your daily income could range from ₦10,000 to ₦40,000 in commissions. So your location and the number of customers you serve determine your profit.

Our Take

You can start a POS business in Nigeria with as low as ₦100,000 to ₦200,000, depending on your chosen location and the scale at which you plan to operate. POS business has few entry barriers, and the potential for steady daily earnings is guaranteed. However, careful planning and choosing the right location and service provider are important to success in this industry.