The Point-of-Sale (PoS) business has some challenges though it is a lucrative and an- easy venture. From securing the initial equipment to following regulatory policies and operational setbacks, POS agents face unique struggles that often go unnoticed, which allows people to criticise them.

This past week, we interacted with PoS agents to gain firsthand insights into their daily realities and in our conversations with a few vendors, there was a clear pattern of the challenges they face are strikingly similar. In this post, we will discuss these shared experiences, along with practical solutions to address them.

What are some challenges POS agents face?

The following are some shared challenges gathered from POS agents in Nigeria;

• Increased Transaction Fees

On increased transaction fees, agents admit that the rising transaction fees imposed by the CBN have started to negatively affect their businesses. Many customers are said to be turning away with higher charges, which have reduced agents’ transaction volume. In our interactions, two vendors agreed that;

“We don’t have a choice but to increase our charges so we can at least make some profit, but customers don’t understand us. They think we’re being greedy. It’s tough because we’re losing customers every day, and the cost of running the business has gone up more than four times than before.”

• Network Failures and Operational Issues

Unreliable network connections constantly frustrate agents and customers. It leads to failed transactions and a loss of trust.

“There’s no good network service, and we hardly get any power supply. It’s very annoying when transactions fail more than once, and customers think it’s our fault. Sometimes, I have to spend hours calling the bank to reverse failed payments.”

• Security Risks

Handling cash and operating PoS terminals has made agents targets for robbers and fraudsters. On this issue, another agent has this to say;

“I’ve been robbed twice this new year. It’s like we are being watched, and the thieves attack you at any slight opportunity, especially at night. I try as much as possible to close by 6:30 pm to avoid further losses because it is really difficult to want to continue this business being robbed more than once.”

The agent also added that “Fraud is another big issue. Some customers show fake alerts and collect free money from us. It’s not always easy to verify payments on the spot, so we get scammed like that.”

• Regulatory Challenges

Government policies have become inconsistent, and that affects the POS business. For instance, the mandatory registration with the Corporate Affairs Commission (CAC) and withdrawal limits have become burdensome to agents.

“The CAC registration process is too expensive and complicated. Many of us can’t afford it, and those who try often give up halfway. Also, the withdrawal limits by the CBN have made things harder. Customers can’t use POS services for larger amounts, which reduces our transaction volume.”

• Cash Scarcity

The cash shortage in banks and ATMs with high withdrawal demand has impacted POS operators. On this, an agent reported that;

“There’s been a serious cash shortage lately, and it is affecting our business. We sometimes have to buy cash from other sources at a higher price to meet customer needs. This increases our costs and forces us to charge higher withdrawal fees, but some customers don’t understand that because they think that the bank is the only place we get cash from.”

• Data Theft

With the rise of digital payment systems, PoS agents have become vulnerable to data breaches and fraudulent activities. The issue is concerning as it reduces the level of trust customers have in the agents.

“Though it hasn’t happened to me,” an agent confessed, “but a colleague down the road was once accused of stealing a customer’s data and withdrawing their life’s savings. Despite all the explanations from him, the customer didn’t believe him.” 

Proposed Solutions to Challenges Faced by POS Agents
The challenges fecd by PoS agents in Nigeria are many. They range from high costs of running the business and network issues to security risks and regulatory issues. Based on these interviews, here are some potential solutions:

1. Lower Transaction Fees: Banks and payment processors should collaborate to reduce charges for PoS agents to make the business more sustainable.
2. Improved Network Infrastructure: Telecom companies must prioritise stable connections everywhere, more so in rural areas where the use of POS services is important. 
3. Enhanced Security: The police and other security agencies should work closely with communities to provide better security for everyone living and doing business there.
4. Simplified Registration: The government can make business registration more affordable and straightforward to encourage compliance without overburdening small-sized operators.
5. Policy Revisions: The CBN should revisit withdrawal limits to strike a balance between controlling cash flow and supporting POS businesses.

Tips for POS agents to overcome the challenges

• Educate customers on how the PoS system works, emphasising its safety, convenience, and reliability. In rural areas, use simple language and demonstrations to build trust.
• Be transparent and inform customers of your charges fees upfront to build customer trust and prevent misunderstandings.
• Diversify services by providing more than just cash withdrawal services. You can offer bill payments, airtime top-ups, and bank transfers to maintain business flow during cash shortages.

• Negotiate with agency banking service providers about possible reductions in transaction fees or alternative pricing plans.

• Have backup options for both network and power to switch between during outages.
• If a transaction fails due to the network, explain the situation calmly and assure them of refunds for failed transactions.

• Avoid keeping large sums of money with you.  
• Double-check alerts for payment confirmations to avoid falling victim to fake transfers.

• Register your business with the CAC and comply with regulations to avoid penalties or disruptions. You can contact your agency banking service provider if the process is too complicated.
• Keep up with updates from the Central Bank of Nigeria (CBN) and other regulatory bodies to understand new policies and adapt quickly.

Our Take

The POS business is all about adaptability and resilience to stay ahead by embracing solutions. You may face many challenges as a POS agent, from managing cash flow to dealing with system outages and handling security concerns. However, you can overcome these challenges by adopting the proactive strategies mentioned above and thrive in the business.

Bonus: Kashzoo agents and anyone interested in registering their POS business can contact our customer care for proper guidance.