Have you ever taken time to wonder how tough your life would have been without the people who operate a POS Business in Nigeria?
POS business in Nigeria has evolved over the past decade into one of the fastest rising businesses that can be started with a little investment capital.
Also called Agency Banking, the POS business has become a good source of revenue for people who are already running a business but are looking for an extra profit point or for fresh and budding entrepreneurs who seek to make some money by the side.
How Profitable is POS Business in Nigeria
The very first question people ask is on how much money can be made in this business.
From a deep research and series of interviews, the POS business is a very profitable business to venture into since starting and running the business does not include excessive overheads. A lot of factors play a role in the profitability of POS business in Nigeria with the major factor being the location of your business.
Since the target market of a POS business is a set of people with limited or no access to banks and ATM machines, siting your POS business in such areas with a huge population but far from any bank or ATM machine would mean that you’d cash out a considerable amount of profit per day.
The daily profits come from the service charges your customers pay for each credit or debit transactions they perform with you and (in some cases) bank commissions paid to POS agents.
For instance, say you charge 500 for every 10,000 Naira transaction, it means that you would make as much as 2,000 naira for every 40,000 Naira transaction.
Advantages of POS Business in Nigeria
The advantages of starting a POS business are plenty because of the running cost and profitability of the business.
Disadvantages of POS Business in Nigeria
It is widely known that a profitable POS agent often carry (or transact) huge amount of money daily which may make them targets for robbery or unnecessary attacks from criminals.
Another challenge of fraudulent customers who patronize POS agents with fake or counterfeit money is a big scare especially for agents who cannot figure out a fake money once they either look at it or touch it.
Also learn how to figure out fake currencies so that you don’t run huge losses out of carelessness.
How to Start a POS business in Nigeria
1. Get a Shop in a Good Location
Getting a shop in a good location is the number one thing that must be considered while starting off.
The bigger the population, the better for your business as you’d make more profit while serving a huge number of people where there is no bank.
Now, even if there happens to be a bank close to you, be sure to locate your business in such areas where people do not have the time to walk into any banking hall or ATM for any financial transaction.
2. Approach a Bank or Agent
There are also some other designated/licensed agents that issue the relevant equipment to help you start and run your POS business profitably.
Some of those agents include: QuickTeller, Paga, PocketMonie, Opay, FirstMonie, etc.
Standard procedures require that you fill some agreement forms that define their transaction conditions.
Upon completion, your application is reviewed in line with the Central Bank of Nigeria’s terms and conditions.
These banks and agents have a few required documentations you must have and some of them are:
I. Valid means of identification like National Identity Card, International Passport, a driver’s license, etc.
II. Bank Verification Number (BVN)
III. Passport photographs
IV. Current account referees
V. An evidence of your business registration with the CAC
VI. A minimum of 50,000 Naira working capital
VII. Tax Identification Number (TIN)
Once you meet every requirement and your application is approved, all equipment needed to run your business properly would be issued to you which means that you are free to start running your POS business without interference.
3. Render Quality Service
Quality service is the reason why your customers would continue coming to patronize you. While it is important to consider other things that would help you start, it makes complete sense for you to know that what keeps you in business in quality customer relationship and service rendering.
Always seek to end every transaction in a peaceful and jovial way; that way, your customers would always prefer to patronize you.
4. Market Your New Business
Most POS businesses often depend on “walk-in” clients who just figures out on their own that such businesses exists in their locality.
Since the profitability depends on the number of people who patronizes you per time, it becomes important that you market your business even using the Internet and let people know your rates and how reliable you are in service rendering.
Depending only on “walk-in” customers leaves you at the mercy of your competitors and whatever number customers that casually come to you.
Cost of Starting a POS Business in Nigeria
The exact amount required to start a POS business in Nigeria is relative because of the cost of acquiring all relevant equipment and the cost of renting or acquiring an office space (may be a kiosk depending on your budget) depending on your location or the number of services you’d like to render.
The most basic money you’d need would be the amount to facilitate your first few withdrawals before you start turning out profits; this makes it one of these businesses a student can start easily on a tight budget.
The low amount of money required to start a POS business in Nigeria and the profitability potential of the business makes it a very good business to start if you are looking for a business that guarantees profits with a very low overhead.
The need of banking or financial services keeps rising even in rural places and this makes it very easy to start the business and profit from it even in rural places.
Do not also forget to guide yourself and business against fraudulent customers that would patronize you with fake currencies.