Like every other typical day, you're in the market to purchase stuff or pay cash for your transport fare. 

You realize you don't have enough money, but you're not worried because you know gone are the days when you had to stand in a 'snail-like motion' bank ATM queue to withdraw cash. 

Or as a business owner, you're no longer fretting about how to receive payment if your customer doesn't have cash or wants to pay a huge amount.

It's all thanks to the numerous Point of Sale (POS) terminals scattered nationwide. The POS business has received huge recognition over the past few years. In fact, the Nigeria Inter-Bank Settlement System stated that over 2.7 million POS terminals were deployed in the nation as of March 2024. 

Now, that's a big market to consider! If you're interested in acquiring an extra income stream and wondering how to start a POS business in Nigeria, this guide will explain everything you need to know.

Let's dive in!

What is a POS Business?

A POS business is an essential part of the financial sector. It enables a POS agent to offer services to customers, enabling them to withdraw cash, transfer money, and pay bills. 

In other words, it is an infrastructure that enables transactions by acting as a bridge between cash and digital transactions, thereby creating convenient access to financial services.

Why Start a POS Business in Nigeria Today?

Starting a POS business in Nigeria is a lucrative opportunity due to the increasing demand for accessible financial services.

Here are five reasons why you should consider it:

• High Demand for Financial Services: Many Nigerians, especially in rural and semi-urban areas, lack access to traditional banking services, making POS businesses a convenient solution.

• Steady Income Stream: A POS business provides a reliable and consistent source of income through daily cash withdrawals, deposits, and bill payments.

• Low Start-up Costs: Unlike other businesses, starting a POS business requires minimal investment, making it accessible to many entrepreneurs.

• Flexibility and Scalability: POS businesses can be easily combined with other ventures, and with time, you can scale by expanding to multiple locations.

• Support for Financial Inclusion: By running a POS business, you contribute to bridging the financial gap and bringing banking services closer to underserved communities.

Step-by-Step Guide to Starting a POS Business

Before you start a POS business, there are certain steps you must follow, these include;

1. Do a Market Research and Pick a Good location

As with every business venture, the first step to begin a successful POS business is to conduct market research. This enables you to understand your target market properly and make adequate decisions. 

Good market research informs you of your potential customer base and their needs, as well as your competition and market gaps, and shows you how to channel your services. Your customer base can be individuals, small businesses, and so on. 

Therefore, understanding their financial habits, pain points, preferences, etc, can help you determine how to proffer solutions. For instance, if small businesses in your area need a reliable and convenient way to process transactions, or people who need to withdraw cash to make payments, that could be a good place to offer your services. 

You should also consider areas close to bank ATMs, heavy foot traffic like markets, and a safe area with a low theft risk. 

2. Register Your Business and Obtain Required Licenses

The next step to setting up your POS business is to register your POS business and acquire the necessary licenses. Registering your POS business with the CAC ensures that your business is legally recognized, credible, and free from penalties and fines. 

You should also stay informed of the Central Bank of Nigeria's POS business guidelines to comply with the various regulations. Operating without a proper license can affect your business in the longrun, hence the need to do so early on. 

Additionally, having a properly registered POS business boosts customer loyalty and trust by strengthening your business's credibility. 

3. Partner with a Reliable Financial Institution or Aggregator

Partnering with a reliable and speedy financial institution like Moniepoint MFB greatly increases your POS business' reliability. A reliable financial institution ensures that your customer's payments are secure, has an easy-to-use POS terminal, has instant dispute settlement, is compatible with all cards, and accepts both card and transfer payments, to mention a few. 

This partnership is a gateway to accessing the tools and machines needed to run your business smoothly.

4. Purchase the Necessary POS Equipment

Depending on the financial provider you use, there are unique features, requirements, and fees that come with getting a POS terminals. You'll need to properly understand the application process and documents required to acquire or purchase one. 

For instance, some tips to keep in mind when acquiring a Moniepoint POS machine include;

• Moniepoint leases you the POS, so you don't have to spend heavy capital to have a terminal for your business. There is also an option for you to purchase a POS which becomes fully yours after payment.

• Moniepoint cares about your business growth. So, we encourage you to process a weekly target of N140,000 for your leased android terminal. If your POS can't hit this target, it is considered underperforming, and you risk having it reassigned. For an mini POS (which has the same feature as the android POS except that its smaller in size and does not print out receipts)the weekly target is N35,000. If you not reach the target, your POS won’t be retrieved.

• Proper handling of a Moniepoint POS doesn't go without its benefits. If a Moniepoint remains in great condition when retrieved, we will reward you witha refund of N10,000 which is the activation fee.

• Depending on your business rank, Moniepoint charges a flat rate 0.5% of the transaction amount for withdrawals between N1 to N20,000

• Moniepoint charges a flat rate of N100 for transactions above N20,000 and N20 for transfers for pos agents, except for merchants who use the 'purchase feature' as theirs is capped at N1,000

• Moniepoint charges a flat rate of N100 for transactions above N20,000 and N20 for transfers.

• Depending on the transaction rank of the business owner, Moniepoint gives a Business owner a cashback of up to N20 on withdrawals. 

• For airtime, Moniepoint charges 2% for all networks.

• There is no charge placed on bill payments.

By carefully evaluating the various application processes and machine features, you'll be better prepared to operate your POS business in Nigeria.

5. Secure your Start-up Capital

You need money or start-up capital to start your business; a POS business isn't different. However, you do not need to break the bank to begin. Depending on your business needs, you can start with as little as N50,000 to as much as N250,000 based on your business needs. 

To know exactly how much you need, estimate the various costs of setting up, such as the POS machine cost, marketing cost, location rent, and so on. 

You should then analyze your source of capital, be it personal savings, investment, or business loans from banks such as moniepoint MFB. Ultimately, with careful planning and funding, you should be able to successfully set up your functional POS business.

6. Train Yourself or Staff on Operating the POS Machine

As with every successful venture, adequate training is needed to properly operate. Ensure that you receive the required training on operating the POS machines or train any staff you plan on onboarding. You can do this by;

• Reading the POS machine user manual

• Watching tutorial videos or attending sessions

• Communicate constantly with your business representatives to clarify any complex issues.

Doing so can minimize mistakes, speed up transactions, and improve customer satisfaction.

How to Promote and Improve Your POS Business

You can promote and boost your POS business by observing the following tips;

1. Proper Marketing

You should implement adequate strategies to effectively run your POS business in Nigeria and remain profitable. Such strategies can include word-of-mouth, local ads, paid ads, billboards, etc. 

Effective marketing ensures that your business remains relevant and well-known and builds customer loyalty. You can also incorporate referral promos to encourage customer retention and growth.

2. Excellent Customer Service

As a POS business owner, you shouldn't underestimate the importance of providing good customer service. This will enable loyalty from customers and encourage them to refer their friends and business partners. 

Ensure that you and your staff are always available to answer customers' queries, knowledgeable about transaction trends and processes, courteous, and approachable. 

By using a Moniepoint POS, you are guaranteed an assigned business relationship manager who's available 24/7 to handle any POS terminal concerns you may have.

3. Stay Updated and Compliant

To run a successful POS business, you must remain compliant with CBN and your financial provider's regulations, as this will save you from fines and business interruptions. Additionally, you need to stay updated about industry trends and changes so as to provide the best services to your customers while remaining profitable.

Some Common Challenges of Operating a POS in Nigeria

As lucrative as the POS business is in Nigeria, agents often face some challenges such as ;

• Lack of access to a stable network connection: Poor network connection can hinder smooth business operations, thereby hindering your business growth. To combat this, ensure that you use a reliable network provider and get a location with proper network coverage.

• High Commissions: Some agents face the challenge of paying high commissions and transaction charges to their financial partners. Therefore, to avoid these, ensure you use affordable and reliable partners such as Moniepoint MFB.

• Theft and Fraud: Any business that deals with high-volume transactions can be liable for theft and fraud. Ensure that you are located in a safe environment and use a POS machine from a provider that offers security protection while using the machines.

Wrapping Up

By understanding the regulations governing the POS industry, conducting necessary market research, offering excellent customer service, and more, you can begin your profitable POS business today. 

Get started today by signing up on the Moniepoint Business Banking App to access a reliable POS terminal and enjoy lasting profitability.

FAQs

1. How much does it cost to run a POS business?

The cost of setting up and running your POS business in Nigeria depends on the services you wish to offer, your location, and the financial provider you use. 

The average cost can range between N50,000 and N250,000, which covers expenses such as terminal purchases, marketing, and rent. 

2. How much can I make from POS daily?

You can earn a daily amount of N5,000 to N50,000 or more, depending on your business strategy and execution. You can achieve high daily earnings by using a well-planned and executed business model.

3. How do I get a Moniepoint POS?

You can get a Moniepoint POS by;

• Log in to your business account and select the business for which you want a POS terminal.

• On your chosen business's dashboard, click the POS menu under "Channels."

• Click on the POS menu and then click on Request New POS.

• The Moniepoint signature POS terminal is the MP35P Smart POS terminal. It's a user-friendly terminal with a touch screen that makes it easy for anyone to use.

• The Moniepoint terminal costs N21,500. N10,000 is the caution fee, N10,000 is the logistics fee, and N1500 is the insurance fee for a whole year. 

• Click on the MP35P to move on to the next step. 

• Fill in the address where you would like your Moniepoint POS delivered. 

• Once done, fund your Business Account with a minimum of ₦21,500 for the POS Terminal and complete the request by making a payment. 

• You will be instantly assigned a dedicated Relationship Manager from Moniepoint. Click "Select RM" to see more details about them. The Relationship Manager will deliver the POS terminal to you within 48 hours, train you on how to use it, and answer any questions you may have.

4. How much does a Moniepoint POS terminal cost in Nigeria?

The android is 23k inclusive of the insurance fee, there's no delivery fee added to this fee. The business owner can decide to pick it up at the office or meet the business relationship manager at preferred location to collect the terminal or you choose to bear the cost for delivery separately. The MPOS terminal fee is 15k which covers insurance and no delivery charge is added to the terminal amount paid. The delivery is decided by the BRM and BO on how it should be received.