How to Start a POS Business in Nigeria and Succeed

With over 60 million Nigerian adults living in rural areas and lacking access to banks, starting a POS business in Nigeria is indeed a viable business option to take into consideration.

These businesses are known to offer services that let patrons pay utility bills, make financial transactions, and also purchase items in shops.

POS are genuinely being used in numerous places such as retail outlet, places of employment, fuel points, pharmacies, eateries, and many more.

Aside from that, the continuous acceptance of electronic financial dealings has helped propel the POS Business in the country.

Nevertheless, to ensure you attain success when starting and operating a POS Business in Nigeria, it is pertinent you understand the market and the necessary steps to start and run a successful POS Business.

Steps on How to Start a POS Business in Nigeria

1. Conduct Market Research

Truth be told, a POS business in a country like Nigeria is a top income-generating endeavor particularly owing to the large amount of the populace living in underserved and rural regions.

Have it in mind that these individuals still need to run financial transactions just like everybody else. However, it is pertinent to note that starting a POS business in Nigeria is not a walk in the park.

Owing to that, it is important you invest in carrying out well-detailed market research to find a viable location and also understand the demand for the services you intend to offer in that market.

Conducting market research will also enable you to understand nearby competitors as well as any other thing you need to guarantee that your business grows and flourishes.

a. Who is your Target Market?

Just as it was noted above, Nigeria (Giant of Africa) with a population of over 200 million people, boasts of a large volume of unbanked individuals and households.

Owing to that, there is a vast market for POS businesses and the target audience is spread across numerous demographic.

A good number of financial dealings in the country pass through POS businesses and this more or less guarantees substantial turnover for operators in the field.

b. Is POS Business a Profitable Business?

Yes, the POS Business in Nigeria is very profitable. Just take a walk around the streets of major cities in Nigeria and it is easy to note that POS businesses have taken over every nook and cranny of the country.

The Central Bank of Nigeria has also reported that the value of transactions involving electronic payments in the country skyrocketed by 38% from 2019 to 2020, and this encouraging trend is expected to keep going.

c. Are There Existing Niches in the Industry?

No. There are no notable niches in the Nigerian POS market. Most often, what differentiates businesses in this sector are the branding and location of the business. Aside from that, all POS businesses more or less offer similar services!

d. Who are the Major Competitors?

• Other POS Businesses
• Commercial Banks
• Mobile money platforms
• Business establishments accepting card payments

e. Are There County or State Regulations or Zoning Laws for POS Business?

Although this is not really prevalent in Nigeria, have it in mind that some local governments or city authorities might have restrictions or regulations that will impact where you can start your POS Business.

Owing to that, it is important you carry out extensive research as well as understand the location where you intend to do business and all related laws pertaining to the location.

f. Is There a Franchise for POS Business?

No. To start and operate a POS Business in Nigeria, you will have to start and build the business from scratch. Although there are massive potentials in the Nigerian POS market, have it in mind that it is unlikely you will find a POS Franchise now or in the nearest future.

g. What Do You Need to Start a POS Business?

• Adequate capital
• A viable location
• POS machine
• Good network reception
• Sunshade

2. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a POS business are;

Creative POS Business Name ideas

• Swift Transactions
• Cash Tent
• Fast Transact
• Slot and Cash
• Access Quik Cash
• Click and Pay
• Zero Worries Transactions
• Flash Dealings
• Paydorm
• Quickpress
• Wise Cashout
• Cindy POS
• Cashzone
• Easy Payments
• Fortunepay
• Greenlight Moneypoint
• Fredrick POS Zone
• Expert Transact
• Cash 24/7
• Flex Payments

3. Register your Business

a. What Type of Business Structure is Best for POS Business?

The best business structure for your POS Business in Nigeria will depend on the size of your business as well as how intricate the services you offer are.

Nevertheless, note that most POS businesses in the country are structured as sole proprietorships particularly since they fall within small and medium enterprises. Howbeit, you can choose to register your POS Business as a partnership or even a limited liability company.

b. List Steps to Register a Business in Nigeria

• Choose a Suitable Name
• Complete CAC pre-registration form
• Pay all Necessary Fees
• Upload Documents for Processing
• Collect Certificate

c. What Type of License is Needed to Open a POS Business?

• CAC registration
• Tax registration
• Permits and Approvals from the Ministry of Environment or Fire Service
• Bank approval

d. What Type of Certification is Needed to Open a POS Business?

There are no certifications needed to start and operate a POS Business in Nigeria; however, there are certain rules and regulations to be aware of and they will differ depending on your location and the financial institution you choose to work with.

e. What Documents are Needed to Open a POS Business?

• Acceptable Forms of Identity (National ID card, driver’s license, international passport, or voter’s card)
• BVN (Bank Verification Number)
• two (2) passport pictures
• two (2) references for current accounts
• CAC Certificate as proof of company registration
• TIN (Tax Identification Number)

f. Do You Need a Trademark, Copyright, or Patent?

Not at all! You wouldn’t need to take steps to protect your intellectual property rights while operating a POS Business in Nigeria.

Although intellectual property rights protection is still not prevalent in the giant of Africa, however, it is imperative to reiterate that you won’t have any need to invest in protecting intellectual property rights unless you fund your business logo and slogan very important or overly sensitive to protect.

Aside from that, it is totally a waste of valuable resources to seek to invest in protecting your POS Business trademark, copyright, or patent.

4. Do your Cost Analysis and Budgeting

a. How Much Does It Cost to Start a POS Business?

Truth be told, the cost of starting a POS business in Nigeria will vary from around 50,000 to N1 million. Have it in mind that the exact cost will most definitely vary from one entrepreneur to the next, as well as the location you intend to start and offer your POS services.

For instance, the cost of rent in Umuahia wouldn’t compare with the cost of rent in a more urban city like Abuja. Aside from that, the financial institution you choose to work with will also impact the exact amount you need to start up this business. A good number of POS businesses tend to use more than one POS device, and this will entail more capital investment.

 b. What are the Costs Involved?

• POS Machine: Varies depending on the financial institution
• Rent: N120,000 – N500,000
• Internet connectivity: N1500 – N20,000
• Power Source (Generator): N35,000 – N200,000
• Capital: N50,000 – N1 million

 c. What Factors Determine the Cost of Opening a POS Business?

• Location
• Financial Institution
• Business size
• POS terminals
• Network provider

d. Do You Need to Build a Facility?

You need a physical location to start and operate a POS Business. Unless your plan is to start and run your POS Business from your house, have it in mind that it is necessary that you choose a good location. Don’t forget that the location you choose will make or break your POS Business.

It has been proven that POS Businesses located in bus stops, T-junctions, or intersections where hundreds of people cross on a daily basis, tend to generate more revenue.

 e. What are the Ongoing Expenses for Running a POS Business?

• Rent
• Internet connectivity
• Cost of processing transactions
• Fuel
• Maintenance and repair
• Promotion and advertising
• Personal expenses

f. What is the Average Salary of your Staff?

It is important to note that most POS Businesses in Nigeria are started by a single owner who also doubles as the only employee of the business. However, in recent times, we have also witnessed POS Business owners employing just one operator.

Nevertheless, when starting a POS business, it is imperative you take into consideration the salary or remuneration of an employee especially if you won’t be actively engaging in the everyday operation of the business. Budget around N20,000 to N40,000 monthly for just one employee!

g. How Do You Get Funding to Start a POS Business?

A POS business, particularly, in Nigeria requires substantial funding to ensure it can provide top-notch services to clients as well excel in the industry.

Note that obtaining capital to start a business in Nigeria could be devastating and tiring, howbeit, here are the top options to consider.

• Personal savings
• Friends and family
• Crowdfunding sites like FundAnEnterprise or NaijaFund
• Government grants
• Loans from Microfinance institutions

5. Write a Business Plan

a. Executive Summary

With the Nigeria Government insistent on a Cashless economy, Eazy Cash will serve as an electronic transaction merchant.

We are eager to offer seamless, secure, and fast financial transactional services to people and business enterprises in Umuahia, Abia State.

Our sole aim is to ensure that people and businesses can carry out monetary transactions without the hitch and stress that comes with long bank queues.

Our business establishment at No. 16 Bank Road, Umuahia will be home to various financial activities, which would normally encompass card transactions, bank transfers, and mobile payments. We will strive every day to ensure that our customers can transfer and receive cash effortlessly.

At Eazy Cash, we also offer competitive transaction fees, and fast settlement times, coupled with mind-blowing client experience.

b. Products and Service

At Eazy Cash, we intend to offer products and services that will help see to the varying needs of our clients. These services include;

• Mobile payment solutions
• Online payment solutions
• Bill payment services
• Transaction monitoring and reporting
• Airtime recharge
• Sale of Mifi and Routers

c. Mission Statement

We at Eazy Cash are devoted and eager to deliver top-of-the-class financial services and solutions to businesses and people in Umuahia, Abia State.

We will always provide exemplary client experience as well as steadily seek fresh and creative means to cater to the ever-growing transactional needs of the Nigerian population.

We will strive to remain the premium point for a wide range of payment solutions that deliver value to people and businesses in Umuahia.

Vision Statement

Our vision at Eazy Cash is to build a business where the products and services we offer help our clients see to their electronic transactional needs and ensure that they don’t have to go through the stress of long bank queues and delays.

We want to be attributed with modern payment solutions that ensure that people can send and receive cash seamlessly, while also steadily exploring new means and partnerships that ensure that what we offer is effortless, convenient, and accessible.

d. Goals and Objectives

• Provide customers with competitive transaction rates
• Grow our clientele
• Bolster our product offerings
• Boast Eazy Cash transaction volumes
• Improve transaction security
• Leverage promotional activities to encourage financial inclusion
• Offer top-notch customer service

e. Organizational Structure

• General Manager
• Head of Sales and Marketing
• Information Technologist
• POS Attendants
• Accountant
• Security

Marketing Plan

a. SWOT Analysis

Strength

• Modern services and solutions that make financial activities easy and seamless for people and businesses in Umuahia
• Topnotch client experience that will most definitely surpass our client’s expectations.
• Steady improvement in each of the technologies and security protocols utilized at Eazy Cash.

Weakness

• Eazy Cash is dependent on third-party payment processors for a good number of our financial services.
• New business in the POS sector and the competition from already established operators
• Not enough funds to extensively promote and advertise Eazy Cash.

Opportunities

• The ever-rising need for comprehensive POS solutions in Umuahia
• The growing adoption of e-commerce and online business, and the need for seamless transactions.
• The fast-growing need for financial inclusion within and beyond Umuahia and Abia State.
• The possibilities to grow the solutions we offer as well as partnerships with financial institutions in Abia State.

Threats

• Poor Electricity Supply
• Poor Network Service
• Increasing Insecurity and Crime Rate Level
• Competitors

b. How Do POS Businesses Make Money?

Ways Eazy Cash will make money include;

• Commissions
• Service charge
• Interchange fees
• Interest on deposits
• Sale of mifi and routers

c. Payment Options

• Payment via bank transfer
• Payment via credit cards/Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via mobile money transfer
• Payment via QR Codes

d. Sales & Advertising Strategies

• Email marketing/newsletters – Send out emails on a routine basis to clients and prospects.
• Seek referrals – Provide rewards to customers who refer new clients.
• Paid social media ads – Select locations that will connect your target audience and run targeted ads.
• Partner with financial institutions
• Offer top-notch customer service
• Leverage retargeting techniques
• Build trust by adding customer reviews, ratings, and testimonials to our site

Financial Projection

a. How Much Should You Charge for your product/Service?

Just as was noted above, POS Businesses in Nigeria generate revenue from the commission and service charges they get from every client that transacts with their POS machine.

Note that if a client intends to withdraw or deposit N5,000, most POS points in the country will charge N100 for the transaction, which they will also have to share with their POS Provider.

The POS Business might have to take N60 or more as commission while the POS provider or financial institution takes N40.

b. How Much Profit Do POS Business Owners Make a Year?

This will most definitely vary; however, POS Business owners in Nigeria tend to make on average around N7,000 to N10,000 daily.

c. What Factors Determine the Amount of Profit to Be Made?

• Location
• POS provider
• Network connectivity
• Commission and service fees charged
• Marketing and advertising strategies.
• Transaction volume.
• Operating expenditures

d. What is the Profit Margin of a POS Business?

While this will also vary based on a few of the factors noted above, the profit margin for POS businesses in Nigeria tends to be around 0.5% to 1.5% per transaction.

e. What is the Sales Forecast?

• First Fiscal Year (FY1): N382,000
• Second Fiscal Year (FY2): N595,000
• Third Fiscal Year (FY3): N839,000

6. Set Up your Shop/Office

a. How Do You Choose a Perfect Location for POS Business

To really attain success in this line of business, you have to take your time to find or pick locations with high foot traffic such as markets, shopping malls, event centers, stadiums, and public places.

Have it in mind that high foot traffic will most definitely benefit your daily profit. Nevertheless, basic factors to consider when choosing the ideal location for your POS Business in Nigeria include:

• Foot traffic
• Network reception
• Proximity to banks and ATMs
• Crime level

b. What State and City is Best to Open a POS Business?

• Aba, Abia State
• Lagos, Lagos State
• Enugu, Enugu State
• Calabar, Cross River State
• Ibadan, Oyo State
• Benin City, Edo State
• Kano, Kano State
• Ilorin, Kwara State
• Owerri, Imo State
• Jos, Plateau

c. What Equipment is Needed to Operate?

• POS terminal
• Router or mifi or any mobile device
• Generator or any reliable source of electricity
• Printer
• Barcode scanner
• Sunshade

Steps for Getting the POS Machine from GTBank

• Go to your closest GTBank branch.
• Find the next accessible customer support representative within the banking hall.
• Obtain a POS enrollment form.
• Comply with the requirements
  • You must have a GTB Current Account.
  • Valid photo identification (passport, voter’s card, national identification card, or driver’s license).
  • You must already have a business site.
  • A utility bill is also required as confirmation of your home’s address.
• The moment your request is accepted, GTBank will reach out to you to arrange for you to pick up your GTbank POS.
• On the other hand, you can complete the GTBank mobile money agent application and bring it to your nearest GTBank branch.

Steps for Getting the POS Machine from Zenith Bank

Complete the procedures necessary to qualify as a Zenith Bank POS Agent.

• Proceed to the closest Zenith Bank and ask for customer service.
• Request a POS Agent enrollment form from them.
• Complete it and send it in.
• They will provide you with a Zenith Bank POS machine after your request is approved. Then, on your Android phone, install the Zenith banking app and begin your POS agency company.

It should be noted that becoming a Zenith Bank POS agent is completely free, thus there is no need to pay anyone else.

Steps for Getting the POS Machine from First Bank

Here are ways to qualify as a FirstBank POS agent or a Firstmonie agent.

• Navigate to the FirstMonie agent banking website at https://www.firstbanknigeria.com/personal/ways-to-bank/firstmonie/agent-banking/. There is going to be a FirstMonie agent enrollment application that you’ll have to fill out and confirm your acceptance of the conditions and terms of their services.
• In order to transmit your request to First Bank, click the “Send” button.
• You are able to verify the progress of your POS agent application at the closest Firstbank branch in order to guarantee speedier processing. Make certain you bring the entire list of necessary paperwork with you.

Steps for Getting the POS Machine from Opay

• Install the Opay app from the Google Play store.
• Ask for an OPay merchant enrollment form by emailing ng-support@opay-inc.com.
• Alternatively, sign in to the Opay app and select the Merchant application icon.
• Insert each of the details requested on the following page.
• Submit your last three months’ worth of company transactions.
• Submit a valid identification card (International Passport, Voters’ Card, National identification card, or Driver’s License).
• Take a picture of your company location and post it to the site.
• Send for authorization and review.

Steps for Getting the POS Machine from Monie Point

• Browse the official website of Moniepoint.
• Fill out and complete the Moniepoint agent enrollment form.
• Ensure your telephone number and email address are correct, and then an agent will get in touch with you within 48 hours of registering.
• The Agent would supply you with instructions concerning what to do afterward and then authenticate you as an agent.
• You are able to control your account by logging onto your Moniepoint POS dashboard.

7. Hire Employees

Although it is possible and common for POS Businesses in Nigeria to be started and operated as one-man operations, the need to employ more hands may arise as your business grows.

When that time comes, it is pertinent you ensure that the workers you are bringing on understand the sensitivity of the business and are properly trained to render the services you offer because they will be required to take charge of the point-of-sale systems while offering assistance to clients.

8. Launch the Business Proper

If you intend to run a successful POS Business in Nigeria, aside from seeking result-oriented means to advertise and promote your business, it is very necessary to properly brand your business.

Although there might be no need to put together a launch party, properly branding your business will most definitely make you stand out from other businesses in this sector, and fusing technology and traditional marketing techniques present more functionality.

Have in mind that there are numerous ways to market your POS Business in Nigeria; howbeit, the best strategies for your business will depend on your location, the services you provide, and the POS provider you use.

a. What Makes a POS Business Successful?

• Viable location
• Substantial working capital
• Reliable devices and internet connectivity
• Efficient promotional and marketing strategies
• Strategic partnerships and collaborations
• Competitive fees
• Topnotch client service
• Expanding of services

b. What Happens During a Typical Day at a POS Business?

Every day in a POS Business is more or less the same because it concerns using a POS machine to complete financial transactions using a customer’s debit card. Note that it begins with setting up shop for the day and inserting clients’ debit cards into the POS machine.

Once the machine processes the card, the operator will then have to pick the appropriate transaction and input the necessary details and amount.

Afterward, the consumer will have to input their four-digit Pin to authorize the transaction. Once the financial institution server acknowledges the transaction, the GPRS network will print receipts for both the customer and the POS agent.

c. What Skills and Experience Do You Need to Build a POS Business?

• Determination
• Resourcefulness
• Creativity Skills
• Strategy Skills
• Customer Service Skills
• Time Management Skills
• Adaptability Skills
• Accounting Skills
• Sales Skills