On every street, you will find a banner that says “POS Available Here,” sometimes with an umbrella shed as the store, other times with a proper shop building.
Point of Sale (POS) businesses have boomed, successfully substituting traditional banks’ ATMs by offering essential financial services such as cash withdrawals, deposits, bill payments, and account openings where ever there's a machine.
What Is A POS Business?
A POS business provides a wide range of financial services smoothly and conveniently to customers, but typically involves providing electronic payment services to customers through a POS terminal.
These services include:
Cash Withdrawals: Allows customers to withdraw cash from their bank accounts.
Cash Deposits: Here, customers deposit money into their accounts by giving the merchant cash and have the amount sent to their accounts.
Bill Payments: Customers can now pay their light, water and internet bills at POS points.
Airtime Recharge: Offering mobile phone airtime top-ups.
Is a POS Business Profitable?
Yes, a POS business can be highly profitable. Earnings are primarily generated through service charges on transactions. Cash withdrawals for instance, where a fee of ₦100 is charged for every ₦5,000 withdrawn, bill payments, and airtime recharge, earning commissions from service providers for facilitating these transactions.
Daily earnings typically range from ₦10,000 to ₦30,000, depending on factors like where you are, customer traffic, and what services you are offering, which potentially means a monthly income of ₦150,000 to ₦600,000. However, how much profit you make will be influenced by operating costs, competition, and transaction volumes.
Setting Up Your POS Business
Conducting Market Research:
Before launching your POS business, it is important to conduct thorough market research to understand the demand and competition.Identify Target Areas
You would have to look for locations with high traffic and limited banking services, such as markets, busy streets, student areas, filling stations, malls and supermarkets, commercial areas, pharmacies, and motor parks.
Analyze Competitors
Before starting a POS business, observe other POS agents in the area. Identify service gaps, like the need for bill payments or internet subscriptions, that competitors aren't fulfilling. Offer these additional services to attract more customers and gain a competitive advantage.
How to Choose the Right Location for Your POS Business
Choosing the right location for your business can determine just how successful your business can be. Here are a few things to consider when choosing a location for your POS business:
Security: Since you are dealing with a high volume of cash, security should be a big factor to consider for you and your business’s safety, as well as your customers, to reduce the risk of theft.
Network reliability: Network impacts how swift your transactions are and ensures the ease and convenience of your customers.
Traffic: It is only natural that you set up your POS business in areas with high foot traffic like markets, parks, business and residential areas, student areas etc. to increase your chances of profits. Also, ensure that you don’t set up your POS business near banks and ATMs.
How to Register a POS Business in Nigeria
To operate legally, you must register your POS business with the Corporate Affairs Commission (CAC). This process involves:
Deciding on a Business Structure
Your business structure depends on the size of your business and your long-term goals. You may decide to register as a business name if you run a small POS company or are a sole proprietor. Registering as a Limited Liability Company (LLC) would be the better choice if your company is bigger and needs more intricate structures in addition to liability protection.Gathering the Required Documents:
The following documents are necessary for your POS business registration:
Two prospective business names.
A valid means of identification: voter's card, national ID, international passport, or driver’s license.
Proof of address.
Utility bill: A tenancy agreement or a utility bill.
Contact details.
Register
To begin the registration process, visit the CAC website and create an account. To create an account, click on Register at the top right corner and fill in your phone number and NIN. Once you are registered, Fill out the necessary forms, which can be obtained from the CAC's website or office.
Choosing a Business Name
The next step is to conduct a name search on the public search using your desired business name. It costs ₦500 to receive your availability code for the reservation of your chosen business name.
Completing your Business Registration
After you have reserved your name, the next step is to fill out the registration form with your business details and upload the required documents mentioned above. It costs ₦10,000 to submit your application.
Wait for Confirmation
The wait time for CAC to review and notify you about the status of your application is three to five days after you’ve submitted your application. If approved, you will receive your Certificate of Registration in your email, so it is important you submit the right details.
How to Choose the Right POS Service Provider
Selecting a reliable POS service provider ensures seamless operations, which in turn guarantees business success. Here are the top 5 POS terminals to consider:
Moniepoint POS
The Moniepoint POS is perfect for all types and sizes of businesses. They have one of the fastest POS application processes and the best customer support system.
There are two types of Moniepoint POS terminals: the Moniepoint smart POS and the Moniepoint mini POS. With ₦21,500, you will get your POS machine within 24–72 hours.
To become a Moniepoint POS agent, visit the Moniepoint official website, fill out the form on the website, complete the registration form provided for Moniepoint agents, and submit it.
Opay POS
Opay, previously known as Paycom, is known for its versatility and its wide array of financial services and solutions for individuals and businesses.
Opay has three types of POS terminals - Mini POS, Android POS, and traditional POS. All three vary in price and output. The mini POS costs ₦8,500, the traditional POS costs ₦35,000, and the Android POS costs ₦50,000.
While some may prefer Moniepoint to Opay due to its low cost of acquisition, Opay has a financial ecosystem that makes banking convenient and easy.
To apply as an Opay POS agent, download the Opay business app, follow the instructions on the page, and submit your application.
Palmpay POS
Palmpay has 2 types of POS - the Smart POS, and the analog POS. The Smart POS machine costs ₦60,000 to buy outright and ₦30,000 for a rental or cautionary fee, while the analog POS costs ₦40,000 to buy outright and ₦20,000 for a cautionary fee or rental.
To apply for the Palmpay POS, download the Palmpay app from the Google Play Store or Apple Store, sign up for your account, upload your KYC documents, and complete your registration.
Kuda Physical POS
Kuda Physical POS offers two POS acquisition options for businesses:
Purchase: Buy the device outright for ₦80,000. This includes the cost of the device, but delivery fees apply.
Rental: Rent the device with a ₦15,000 refundable deposit. To qualify for a refund, process at least 15 card payments daily and achieve ₦10 million in sales within three months. If the targets are unmet, Kuda may reclaim the device. Additional delivery charges apply.
Both options provide a secure and efficient way to purchase a POS terminal for your business.
Paga POS
The Paga POS machine costs ₦30,000. To get started, go to Paga website http://www.mypaga.com, select "Agent," select "Become an Agent, and fill out the interest form for the Paga agency, and then someone from their team reaches out to you to discuss the next steps.
Factors to Consider When Choosing A POS Service Provider
When picking a provider, look at things like transaction fees (so you’re not losing money), commission structures (to know how you’ll get paid), network reliability (because failed transactions are frustrating), and customer support (for when you need quick help). A good provider makes your life easier and keeps your customers happy.
Take the time to compare your options, and go with one that keeps transactions smooth, fees fair, and customers satisfied.