Career Guidance

How to Start POS Business in Nigeria

NewSchoolWeb Team

Do you want to start a POS business in Nigeria but don’t know how to go about it?

If yes, you’ve come to the right place!

POS (point of sale) is a very lucrative business in Nigeria.

Given how crowded banks can be, people prefer to visit POS shops to do their bank transactions.

I could remember a few years back when the POS business started in Nigeria.

It was just like a joke then. It wasn’t that serious.

But all of a sudden, it blew up and became a popular business in Nigeria.

You cannot walk two kilometers in most Nigerian streets without seeing a POS shop.

POS helps to simplify bank transactions for individuals.

Imagine going to the bank and standing in a long queue just to transfer or withdraw money.

But with POS, you can do this in less than 5 minutes.

So have you seen why Nigerians love to patronize POS business?

Nobody loves stress, so people prefer to just enter a POS shop and get their bank transactions done within a couple of minutes.

However, for some time now, I have gotten several questions from people regarding how they can start a POS business in Nigeria.

The thing is, many people want to start a POS business but they don’t know how to go about it.

So if you are among those that are eager to start this business but need guidance, don’t worry, I got you covered!

In this article, I will show you how to start POS business in Nigeria.

By the end of this article, you will find out how to successfully launch your own POS business in Nigeria.

Ready? Let’s go!

Also Read: How to Start a Boutique Business in Nigeria

How Does POS Business Work in Nigeria?

In Nigeria, the POS (Point of Sale) business is a convenient way for customers to make payments using their debit or credit cards.

To start a POS business, you need to get a POS terminal from a bank or payment processor.

You’ll have to provide some documents and go through a verification process.

Once approved, the bank or payment processor will set up the POS terminal at your business location and give you training on how to use it.

When a customer wants to pay, you just enter the transaction amount into the POS terminal and ask them to insert or swipe their card.

The terminal communicates with the relevant bank to process the transaction.

If approved, the funds are reserved in the customer’s account.

At the end of the day or a specified settlement period, the funds from authorized transactions are settled into your business account.

You may be charged fees for each transaction processed.

It’s important to reconcile your POS transactions regularly with your bank statements and provide good customer service.

The Central Bank of Nigeria oversees the operations to ensure compliance and security.

Remember, specific details may vary depending on the bank or payment processor you choose.

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How to Start POS Business in Nigeria

To successfully start a POS business in Nigeria, follow these steps:

1. Research and Planning

When it comes to starting a POS (Point of Sale) business in Nigeria, research and planning are your best friends.

Let me break it down for you:

First things first, research the POS industry in Nigeria.

Look into market demand, competition, and potential profitability.

Figure out who your target customers are and pinpoint the best locations for your business.

Next, choose a reliable bank or payment processor that offers POS services.

Take your time to compare their offerings, fees, and customer support.

You want a partner that fits your needs and supports your growth.

Now, let’s talk about planning. Define your business goals, strategies, and financial projections.

Decide on your pricing model and consider how you’ll market your services.

Understanding customer preferences will help you tailor your marketing efforts effectively.

Don’t forget about the financial side of things.

Estimate your initial investment, including POS terminals, infrastructure setup, and operational costs.

Project your potential revenue based on transaction volume and average ticket size.

By conducting thorough research and creating a solid plan, you’ll enter the POS business well-prepared and ready to succeed.

Remember, it’s all about understanding the market, choosing the right partners, and setting clear goals for your venture.

2. Choose a Bank or Payment Processor

When it comes to starting a POS (Point of Sale) business in Nigeria, choosing the right bank or payment processor is a big deal.

Here’s why it matters:

First off, you want to partner with a reputable and reliable institution.

Look for banks or payment processors that have a good reputation and a strong presence in Nigeria’s financial sector.

You need someone you can trust to handle your transactions securely and smoothly.

Next, compare their offerings.

Check out the features of their POS services, like transaction speed, security measures, and card compatibility.

You want a system that’s fast, secure, and can handle different types of cards.

Fees and charges are important too. Different banks or payment processors have different fee structures.

Take a close look at their transaction fees, monthly charges, and any other costs involved.

You want a provider with competitive rates that won’t eat into your profits.

Consider the settlement process as well.

You need a bank or payment processor that can quickly and reliably settle the funds from your POS transactions.

Timely settlements help with cash flow and keeping your finances in order.

Lastly, talk to other business owners or industry experts for recommendations.

They can share their experiences and give you valuable insights.

Choosing the right bank or payment processor sets the stage for a successful POS business.

Find a partner you can rely on, with secure transactions, fair fees, great customer support, and dependable fund settlements.

3. Documentation and Verification

When starting a POS (Point of Sale) business in Nigeria, the documentation and verification process plays a crucial role.

Let me break it down in simple terms:

You’ll need to gather certain documents like your ID, business registration details, proof of address, and bank statements.

These documents are important for verifying your identity, legality, and financial standing.

The bank or payment processor you’re partnering with will review them carefully.

Verification is like a background check.

They want to ensure you’re a legitimate business and comply with the rules.

It’s their way of maintaining trust and security in the financial system, which is important for everyone involved.

So, make sure you provide accurate and up-to-date information.

Double-check your documents to avoid any mistakes.

The last thing you want is delays or rejection due to inaccurate or fake documents.

Completing the documentation and verification process successfully shows that you’re a credible business owner.

It gives confidence to the bank or payment processor and helps you comply with the regulations.

It’s all about building trust and credibility for a solid foundation in the POS business.

Remember, to stay organized, be truthful, and provide the required documents promptly.

It’ll make the process smoother and set you up for success.

Also See: How to Start Soft Drinks Business in Nigeria

4. Application and Agreement

When it comes to starting a POS (Point of Sale) business in Nigeria, the application and agreement process is a key step.

Let me break it down in simple terms:

Once you’ve chosen a bank or payment processor for your POS business, it’s time to fill out an application form.

This form asks for important details about your business, like its structure, contact info, and financial standing.

Just make sure you provide accurate and complete information to smoothen the process.

Next, the bank or payment processor will review your application.

They want to see if your business fits their criteria for offering POS services.

They’ll consider things like your business model, target market, and compliance with regulations.

It’s like they’re checking if you’re a good match.

If your application is approved, you’ll move on to the agreement stage.

This is where you sign a contract with the bank or payment processor.

The agreement covers the nitty-gritty details like fees, settlement periods, security measures, and any other rules or restrictions.

Take your time to read and understand the agreement before signing.

If you have questions, don’t hesitate to ask for clarification.

You want to make sure you’re on the same page and know your rights and responsibilities.

By completing the application and agreement process, you’re formalizing your partnership with the bank or payment processor.

It’s like making things official.

Just remember to be honest, provide accurate info, and fully understand the agreement.

That way, you’ll set yourself up for a successful POS business journey.

5. Acquire POS Terminal

When it comes to starting a POS (Point of Sale) business in Nigeria, acquiring a POS terminal is a game-changer.

Let me break it down for you:

Once you’ve partnered with a bank or payment processor, they’ll provide you with a nifty POS terminal.

It’s like a magic device that lets you process card payments from your customers.

It’s your gateway to accepting debit and credit cards like a pro.

But here’s the deal: don’t just grab the terminal and hope for the best.

Take the time to get proper training on how to use it.

Learn the ins and outs, like how to start transactions, print receipts, and troubleshoot any technical glitches.

The bank or payment processor should guide you through this training process.

Remember, different POS terminals have different features.

Some may even come with fancy extras like inventory management or loyalty program integration.

So, choose one that suits your business needs.

By acquiring a POS terminal, you open up a world of possibilities for your business.

You can offer your customers a range of payment options, making their lives easier.

With the right training and installation, you’ll be rocking seamless and secure transactions, giving your customers a top-notch experience.

6. Set Up and Installation

Setting up and installing your POS (Point of Sale) system is a crucial step when starting a POS business in Nigeria.

Let me walk you through it in simple terms:

First things first, find a good spot for your POS setup.

You’ll need a counter or designated area where customers can easily make their payments.

Make sure there’s enough room for your POS terminal, receipt printer, and any other gadgets you’ll be using.

Now, let’s talk about the connection. You need a reliable internet connection or a trustworthy mobile network.

This ensures smooth transaction processing. Keep it secure to protect your customers’ data.

Once you have the space and connection sorted, it’s time to set up the hardware.

Follow the instructions provided by the manufacturer or get help from your bank or payment processor.

Connect your POS terminal and any additional devices like a printer or scanner.

Make sure everything’s working properly.

Next up, install the software or applications needed for your POS system.

These applications help with processing transactions and managing inventory.

Keep them updated to ensure security and optimal performance.

Before you go live, it’s crucial to test everything.

Process a few test transactions, print receipts, and double-check the accuracy of your data.

This testing phase helps you catch any issues and fix them before you start serving real customers.

By setting up and installing your POS system correctly, you lay a solid foundation for your business.

It ensures smooth transactions, a better customer experience, and efficient sales and inventory management.

7. Promote Your Business

Promoting your POS (Point of Sale) business is super important when you’re starting out.

Let me break it down for you:

First things first, you need people to know about your awesome POS services.

Create a killer brand identity with a cool logo and a snazzy website.

Get active on social media to show off your benefits like convenience and fast transactions.

Now, let’s talk marketing. Get your business in front of the right people with online ads on social media and search engines.

Collaborate with local businesses or influencers to spread the word even further.

Make sure you offer some sweet incentives to attract customers, like discounts, loyalty programs, or referral rewards.

Happy customers will tell their friends!

Don’t forget about the power of offline marketing.

Hand out flyers or business cards in your local area. Partner up with other businesses for some cross-promotion magic.

Get involved in the community by attending events or hosting workshops.

Show people how your POS system can make their lives easier.

Collect feedback and reviews from happy customers to build trust and show off your reputation.

By promoting your POS business effectively, you’ll get noticed, attract customers, and build a loyal following.

8. Provide Excellent Customer Service

When it comes to starting a POS (Point of Sale) business in Nigeria, providing top-notch customer service is an absolute game-changer.

Let me break it down for you:

First off, delivering excellent customer service sets you apart from the competition.

It’s like a magic touch that leaves a lasting impression and keeps customers coming back.

Treat everyone with respect and give them your undivided attention, no matter how big or small the transaction.

Train your staff (if you have) to be masters of your POS system.

They should know it inside out and be ready to assist customers with any questions or concerns.

A friendly and helpful attitude goes a long way in making customers feel valued.

Efficiency is key. Make sure your POS system is reliable and transactions are lightning-fast.

Nobody likes waiting forever, right? Keep your hardware and software up to date to minimize any technical hiccups.

Listen actively to customer feedback and address any issues pronto.

Showing that you genuinely care about their satisfaction and taking action to make things right speaks volumes.

Personalize the experience.

Train your staff to recognize regular customers and offer personalized recommendations or special deals based on their preferences.

It’s those little gestures that make people feel special.

Remember, happy customers are your best ambassadors.

They’ll tell their friends and family about your stellar service, bringing in more business.

By providing excellent customer service, you’ll build a loyal customer base, boost your reputation, and watch your POS business thrive.

Also See: How to Start Laundry Business in Nigeria

9. Maintain Proper Record Keeping

Proper record-keeping is an absolute must when you’re starting a POS (Point of Sale) business.

Let me explain why and how you can do it effectively:

First things first, keeping good records helps you stay on top of your business.

It allows you to track your sales, monitor trends, and make smart decisions.

Plus, it keeps you in the good books when it comes to taxes and financial reporting.

To keep things organized, start by sorting your receipts and transaction records in a neat and logical manner.

Create separate folders or files for each day, month, or year, depending on how much action you’re seeing.

Consider investing in accounting software or a POS system with record-keeping features.

These tech-savvy tools can automatically capture and store transaction data, generate nifty sales reports, and even help you reconcile your records.

Don’t forget to back up your data regularly to avoid any nightmares.

Keeping an accurate inventory record is key.

Keep tabs on your stock levels, product codes, and prices.

This will help you manage your inventory like a pro and avoid any surprises.

Now, here’s the kicker: regularly reconcile your records with bank statements and other financial documents.

This helps you spot any discrepancies or errors that need fixing.

If you’re not a numbers wizard, don’t sweat it.

Consult with an accountant or bookkeeper who knows the ropes.

They’ll guide you on best practices and ensure you stay on the right side of the law.

By maintaining proper record keeping, you’ll have a clear view of your business performance, stay compliant, and make informed decisions to drive your POS business to success.

10. Stay Informed

Staying informed is a key ingredient when starting your POS (Point of Sale) business in Nigeria.

Let me tell you why it’s so important and how you can do it effectively:

First off, staying in the know keeps you ahead of the game.

It helps you stay on top of the latest trends, technologies, and regulations in the POS industry.

You don’t want to be left behind while others are zooming ahead.

To stay informed, immerse yourself in the industry.

Subscribe to newsletters, read blogs, and participate in forums or networking events.

Connect with like-minded folks who can share valuable insights and experiences.

Now, let’s talk about Nigeria-specific knowledge.

Understand the local market and consumer preferences.

Get a pulse on the payment habits, popular payment methods, and cultural nuances that influence buying behaviors.

That way, you can tailor your offerings to meet the needs of your Nigerian customers.

Keep an eye on the legal stuff too.

Stay updated on any changes in tax regulations, data protection laws, or licensing requirements.

Staying compliant ensures you stay out of trouble and avoid any unnecessary headaches.

Embrace innovation. Stay informed about emerging technologies and trends in the POS industry.

Explore new payment solutions, mobile wallets, or contactless payment options.

By being in the know, you can offer your customers a seamless and up-to-date experience.

Lastly, keep a tab on your competitors.

Learn from their strategies, pricing, and customer service practices.

It’s not about copying, but about finding ways to stand out and provide an even better experience.

By staying informed, you’ll stay ahead of the curve, adapt to changes, and make your POS business shine.

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How Much Can I Use to Start a POS Business in Nigeria?

When it comes to starting a POS (Point of Sale) business in Nigeria, the amount of money you’ll need can vary depending on several factors.

Let’s dive into it:

First off, you’ll need to consider the cost of getting a POS terminal.

These nifty devices can range anywhere from ₦50,000 to ₦ 100,000 or even more, depending on the brand, features, and whether you decide to buy or lease one.

Leasing options can be a more affordable choice if you’re just starting out.

Next, don’t forget about the expenses for licenses and permits.

You may need to register your business, obtain a tax identification number, and secure any necessary licenses from relevant authorities.

The fees can vary, so it’s best to do your homework and find out the exact requirements.

It’s important to have enough working capital to handle daily transactions.

This means having a float of cash to handle customer withdrawals and provide change.

The amount needed will depend on the volume of transactions you expect to process.

Other costs to consider include marketing and advertising, office space or rental fees (if applicable), staff salaries or commissions, and ongoing maintenance and support for your POS system.

While it’s tough to give an exact figure, a ballpark estimate for starting a basic POS business in Nigeria could range from around ₦20,000 to ₦500,000 or more, depending on your specific needs and the scale of your business.

Remember, it’s crucial to create a detailed business plan and budget to get a clear idea of your startup costs.

This will help you ensure you have enough funds to cover initial expenses and set yourself up for success in the world of POS.

Also See: Top 20 High Income Skills in Nigeria

What Are the Requirements for Starting a POS Business in Nigeria?

First things first, you’ll need to register your business with the Corporate Affairs Commission (CAC) in Nigeria.

This involves choosing a unique business name and going through the necessary registration procedures.

Next, you’ll need a Tax Identification Number (TIN) from the Federal Inland Revenue Service (FIRS).

This is important for tax purposes and ensures you’re compliant with tax regulations.

To handle transactions, you’ll need to open a business bank account with a reputable bank in Nigeria.

This account will be used for processing payments from your POS operations.

Now, let’s talk about the star of the show – the POS terminal itself.

You’ll need to acquire a POS terminal from an authorized distributor or a bank.

Make sure it meets the required standards, particularly the Payment Card Industry Data Security Standard (PCI DSS) to ensure secure transactions.

When it comes to documentation, gather your valid identification (like your national ID card, driver’s license, or international passport), a couple of passport photographs, and proof of address (such as utility bills).

Don’t forget to check with the relevant regulatory bodies, such as the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), to see if there are any specific licenses or permits required for your POS business.

It’s also a good idea to undergo training to familiarize yourself with the POS terminal’s functionalities and security measures.

Some banks or payment processors may offer training programs to help you get up to speed.

Lastly, allocate enough capital to cover the startup costs, including the POS terminal, initial working capital, marketing expenses, and any licensing fees that may apply.

Remember, it’s always wise to consult with professionals, such as business consultants or legal advisors, to ensure you’ve met all the necessary requirements and are on the right track to starting your POS business in Nigeria.

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Is POS Business Lucrative in Nigeria?

The POS (Point of Sale) business can be quite lucrative in Nigeria.

Let me break it down for you:

First off, Nigeria has a large population, and while cash is still widely used, there is a growing demand for electronic payment options.

This is where POS services come into play.

As more people embrace the convenience of cashless transactions, the demand for POS services is expected to soar.

The beauty of the POS business is that it allows you to earn revenue through transaction fees or commissions.

Every time a customer makes a payment through your POS terminal, you earn a small fee.

And trust me, those fees can add up quickly, especially if you’re processing a high volume of transactions.

But wait, there’s more!

You can offer additional services like airtime recharge, bill payments, and fund transfers, earning extra commissions from these value-added services.

It’s a win-win for both you and your customers.

What’s great about the POS business is that it’s scalable.

You can start with one terminal and expand as your customer base grows.

Imagine having multiple terminals or even a network of agents generating income for you.

Of course, success in the POS business requires some key ingredients: a strategic location, effective marketing, top-notch customer service, and staying up-to-date with industry trends and technology.

While profitability will depend on factors like location, competition, and operational efficiency, the POS business holds significant potential for entrepreneurs in Nigeria who are ready to seize the opportunity, put in the effort, and build a thriving venture.

So, yes, the POS business can be a lucrative endeavor in Nigeria!

Also Read: 20 Easiest Jobs to Get After Graduation in Nigeria

Frequently Asked Questions (FAQ)

What Should You Consider Before Starting a POS Business in Nigeria?

Thinking about starting a POS business in Nigeria?

Well, here’s what you need to consider.

First, do some market research to understand your potential customers and competitors.

That way, you can offer something unique.

Next, plan your finances carefully to cover setup costs and ongoing expenses.

Make sure you choose reliable hardware and software solutions that work well together.

Don’t forget about legal compliance and security measures.

And lastly, focus on efficient inventory management and providing top-notch customer support for a successful venture!

Can ₦20,000 Start a POS Business in Nigeria?

It’s possible, but it won’t be easy.

You’ll need that money for a POS machine, licenses, and setting up your location.

But don’t forget about other expenses like internet, marketing, and managing cash flow.

Look for affordable POS options, consider partnerships, and get creative with cost-effective marketing.

Just remember, to grow and make good profits, you’ll need to reinvest and plan your finances wisely

How Much Can I Make on POS Per Day in Nigeria?

Wondering how much you can earn daily on a POS in Nigeria? Well, it varies.

The profit you make depends on things like the number and size of transactions, fees you charge, and your operational costs.

On average, some businesses make around ₦1,000 to ₦5,000 per day, but it can be more.

Remember, factors like location, customer demand, competition, and your marketing strategies play a big role.

Keep an eye on your pricing, promotions, and customer service to maximize your daily earnings.

What Can I Add to My POS Business?

Looking to take your POS business to the next level? Here are some ideas to consider.

First, why not offer digital payment options like mobile wallets and online transfers? Customers love convenience!

Consider implementing loyalty programs or rewards to keep them coming back for more.

If you want to attract a wider customer base, add value with services like bill payments, airtime recharge, or money transfers.

And don’t forget about inventory management solutions or analytics tools to appeal to businesses.

Stay up-to-date with technology and customer preferences for a thriving POS business.

Which POS Agent Is the Best in Nigeria?

Looking for the best POS agent in Nigeria? Well, it depends on what you’re looking for.

Some top options are Paga, Opay, and Quickteller.

But the “best” one varies based on your needs.

Consider things like agent commissions, transaction fees, coverage, reliability, customer support, and features offered.

Check out user reviews and ask fellow business owners for recommendations.

Look into their track record, network reach, and technology too.

That way, you’ll find the perfect POS agent that suits your specific business requirements.

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Conclusion

POS business is a very lucrative business in Nigeria and for good reasons.

The demand for POS services in Nigeria will continue to rise given the increasing number of electronic/digital transactions.

If you’ve been wanting to start a POS business, this is the best time to tap into this growing industry.

While the POS business is lucrative, it demands extreme carefulness as it has to do with money.

In this article, I have shown you how to start POS business in Nigeria.

By carefully following the tips I have shared with you in this article, you can successfully launch your own POS business in Nigeria and achieve a great fit.

If you have any questions or inquiries, kindly drop them in the comment section and I will respond as fast as I can.

Good luck!

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