How to Start a POS Business in Nigeria

How to Start a POS Business in Nigeria

How to Start a POS Business in Nigeria

The main reason why people venture into POS asides profit generation is to reach to places where there are limited bank ATMs and even bank buildings. Especially in not too motorable areas. The business is now however taking more grounds day after day as entrepreneurs are rushing into it. If you would love to start a POS business, this article is for you, as it will guide you through ways in which you can start the business.

What is POS: Point of service or sale, abbreviated as POS is a banking service that allows local debit cardholders make payment for goods and services mostly in a retail location. This service makes use of a POS machine in doing the transactions.” POS is a reliable medium of transaction because it reduces the stress of having to carry money around at all times or even going to banks just to join long queues of people. The system is fast and reliable as long there is good network. Customers receive instant notifications once they make transactions. Asides from withdrawing cash through the POS, you can also pay bills like electricity bills, DStv and GOtv subscriptions, airtime, school fees and many other things with a POS machine.

POS business is a prosperous business in Nigeria. If you have been to banks and stood for hours all in the name of making cash transaction, then you will know that POS is a very positive strategy. Asides from providing comforts to people, it has also provided jobs for many young entrepreneurs in Nigeria. The business is profitable, easy to start and less stressful. So if you decide to start a POS Business, below are the steps you need to take.

  1. Approach a bank: POS machine owners are like banks agents. You need to decide on the bank you want to make use of first, once that is done, approach the bank and make your intentions known to them. According to the CBN guide, you can be an agent for as many banks as possible once you meet their requirements. You will be given some documents to fill by the banks you visit. They review your application and see whether you meet the CBN criteria. Once that is done, they seal an agreement with you and you become their agent. Also, you must have an account for a direct deposit for the purpose of the business and provide some documents as part of the requirements for the proposal. Some of the required documents include:
  • Valid means of identification e.g Driver’s license, National ID card, International passport or voter’s card.
  • BVN
  • 2 passport photographs
  • 2 current account references
  • Evidence of business registration (CAC Certificate)
  • Tax Identification Number (TIN)
  • Memorandum and Article of Association.
  • Credit Bureau Report


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  1. Get your equipment: once the bank has submitted your application, then proceed to getting your POS equipment from the bank. You should keep in mind that acquiring a POS machine is not free. You are expected to pay for it. Banks issue POS machines for between 70-200 thousand naira, depending on the specifications and quality such as 2G, 3G, 4G. The higher the specifications, the higher the price and vice versa. While some banks like First bank issue free POS machines to their agent, but you have to meet some certain requirement. You will also need to collect some documents along with the POS machine which you have to keep safe because they are vital documents.

Whether you pay to get your machine or you got it free of charge, you must have in mind that there is a particular percentage you have to pay for POS terminal. Below are some of the things you will get while collecting your POS machine:

  • Point of Sale Terminal; a portable device that facilitates payments of goods and services at bank agent locations using payment cards.
  • Card reader
  • Barcode scanner to scan bills for bill payment transactions
  • Personal identification number (PIN)

How to Start a POS Business in Nigeria

  1. Secure a shop: like many other businesses, starting a POS requires you to have a shop. Secure a shop where you can carry out your business transactions. Secure a place visible enough for people to see you. One amazing thing about POS is that you don’t need to get a shop as big as a warehouse or a very large space. All you need is a small space “a cubicle”. Just secure a very tiny shop, a vendor will even do and put out your business description.

 In securing your shop, also consider your location, because location plays a long role in making sales. It’s best to locate your shop in areas where there are limited or no banks like rural areas. You will save people the stress of having to go to the bank always. And also, you could situate your shop in busy areas like parks, bus stops; anywhere you are sure there are no ATMs and people would love to patronize you. If you notice any ATM is not dispensing, you could meet with people there and tell them of your service, who knows, they might patronize you.

  1. Render your service: once you have collected your machine and you have a location ready, start rendering your services to people in your environment. POS transactions are carried out through terminals and with a POS machine, you can pay bills , withdraw cash, pay for subscriptions, pay school fees for customers while you also earn a particular amount by adding charges to whatever payment they are making.

“In a POS business, the client first request transaction like withdrawal, transfer, or bill payment and presents the debit card. Next, the agent selects the type of transaction on the POS terminal device and enters the amounts, then, insert the debit card into the device and ask the client to secretly enter the four-digit pin. Using the network, the General Packet Radio Service (GPRS) connects with the bank’s server to authorize the transaction. When successful, it immediately prints out the receipt. This process can be repeated for as many customers as you can, as long as you abide by the transaction rules of your host (bank).”


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