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How To Start A POS Business In Nigeria And Its Challenges

How To Start A POS Business In Nigeria And Its Challenges
How To Start A POS Business In Nigeria And Its Challenges.

In most developing countries like Nigeria where most retail businesses doesn’t have electronic means of payment, consumers resort to carrying cash around. However, during a scenario where the cash machine Machine (ATM) is crowded – as commonly seen in Nigeria. the sole option is to seem for a nearest place to urge cash – that’s what POS business in Nigeria does. In other words, POS merchants makes cash available for consumers in exchange for commission.

Notwithstanding, most people are skeptical to enter into the business because they’re unsure if POS business in Nigeria is Profitable or not. Nevertheless, during this post, we’ll discuss the common challenges with POS business and why you ought to consider it together of the lucrative businesses one can venture in.

Having said that, a mean POS merchant during a good location makes a minimum of Ten thousand naira (#10,000) profit on a day to day .

But before we enter details how it’s possible and the way it works, Let’s first explain what a POS business is and why you ought to consider it as a business idea.

What is POS business in Nigeria?
Point of sale (POS) may be a place where a customer executes the payment for goods or services and where sales taxes may become payable. However, because the services of the banks doesn’t serve everybody in Nigeria especially those in remote villages. Banks created POS business as a terminal to bring financial services closer to the unbanked and underbanked segment of the society. Meaning that, you’ll use a POS business center as a surrogate to getting to the bank for your financial services.

Hence, this is often an enormous relief to decongest the already crowded banks and also a channel to bring banking services to the people within the rural communities where banks cannot reach. Therefore, this business is gaining tons of recognition in most under developed and developing countries of the planet like Nigeria.

The POS business agents get money from the commissions they get from completing any of the authorized services as an agent.

Services of a POS Mobile Money Agent

As a POS agent or a Mobile Money Agent, you’ll run the subsequent services for patrons in your location of business.

Opening of Bank accounts
Deposit Money
Withdraw money from any Bank
Send money to any Bank
Pay utility Bills like electricity, Cable TV, airtime and tax payments.
Recharge card printing
Enroll for BVN
Is POS business profitable?
From all indications, market surveys and therefore the popularity of this business, the business is one that’s lucrative. As a matter of fact, this business is one among the foremost lucrative businesses you’ll start with alittle capital. As mentioned earlier, a mean POS merchant during a good location makes a minimum of Ten thousand naira (#10,000) profit on a day to day . But, this assertion isn’t totally true for everybody doing a POS business thanks to some factors especially being during a good location.

On the opposite hand, there are few reasons why POS business in Nigeria will still be profitable regardless of the situation .

Most people don’t even know they will pay their utility bills online or through their bank app, in order that they will always search for a POS agent to assist them.
Bank ATM in Nigeria are always crowded and sometimes unable to dispense cash. Hence, people find it easier to urge money from POS merchants.
So many remote areas have few or no access to banks where they will do transactions. Their only banks are POS merchants.
It a business one can start with low capital and doesn’t require any formal furnishing of shop. Meaning that, you’ll just start with a plastic seat, plastic table and an umbrella.
There are unlimited number of individuals who do many transactions daily in market places, streets, motor parks etc., so, you don’t search for customers, rather, they appear for you.
These and lots of other reasons are why you see POS business creating job opportunities for several Nigerians.

Challenges related to POS business

Every business has its pros and cons. you’ve got read some reasons you’ll concede to open a POS business in Nigeria, now, here are some challenges to also consider and address before starting a POS business.

Robbery: POS business like every other financial institutions attracts the eye of hoodlums. Since, you can’t hire a private security agent, it’s better you find this business at an area that’s relatively secure from attacks. Also, take precautions with what proportion which will be with you at a time and also the moving of the cash to and from the bank.
Banking Network: Its quite frustrating to succeed in a POS terminal and therefore the agent complains of network issue. Consequently, your customers will start loosing confidence in your business if told same story few times. Therefore, to urge the simplest from your POS business in Nigeria, attempt to confirm you subscribe for POS with a gentle network services.
Sourcing a POS machine: to get a POS isn’t too easy, especially for a business starter. The banks in some cases with require you register a business name with Corporate Affairs Commission (CAC) before applying for a POS machine. Others may tell you to attend for a few months as there’s no machine available at moment. of these and lots of more limitations makes sourcing a POS machine a challenge to the business.
Power supply: to stay your machine running for hours, you want to have a close-by spot where you’ll connect the machine. Because many POS agency shops are located in remote areas, there could also be got to add the value of generator to your budget. Therefore, some merchants resort to having quite one POS machine.
Lack of regulation: Recently, every Dick and Harry is now in POS business. Therefore, there’s no regulation to the spacing of outlets , there’s no fixed price on the fees per thousand naira and eventually , good locations are extremely hard to seek out since the business is already getting crowded. However, this could not discourage you to undertake the business.
How to start a POS business in Nigeria
Below may be a guide to a step by step method of starting a Mobile Money Agent or POS business in Nigeria.

1. Draw a POS business plan:
It is encouraging that each potential business have a business plan. This acts as a guide/map of the business, the business type, the goals and the way you would like to realize them. But most significantly , attempt to set a time-frame for you to realize those goals. Therefore, POS business plan is vital because it’ll be a business blueprint to people that wish to grow and expand within the future.

2. Conduct a market research:
Like I said earlier, POS business may be a lucrative one with numerous potential opportunities. However, it’s necessary that you simply ask questions on the way to get customers, who your potential customers are, the bank with good commission rates, the value and charges by the issuing financial institutions. of these and lots of other factors that affects the action and reaction you get in your business should be addressed and mapped out before the birth of the business.

3. Raise your capital:
Normally, Mobile Money agency isn’t capital intensive. the wants aren’t plenty and includes; a location, a POS machine, a seat and a table. With #50,000, of these are often fixed and prepared to be used . additionally thereto , you’ll have a minimum of another #50,000 that you simply will use for the exchange. As a result, you’ll got to raise a capital of a minimum of #110,000 to start out .

4. Get a location:
Another vital step in starting a POS merchant business is getting an appropriate location for the business. In fact, this is often the speed limiting step that determines the profitability of the business. Usually, good locations to determine a POS business in Nigeria includes; Motor parks, Markets, densely populated Residential areas and villages/remote areas. Therefore, an honest location for your business should be an area where people will need quick cash but with limited access to banks, this might flow from to distance or population within the bank. Finally, a location might not be necessarily a store . For starters with low capital, you’ll start in an open place thus far your money is safe from theft or robbery.

5. Register a business name:
This step isn’t necessarily important for everybody who wish to start out the business. However, it’s one among the wants of some banks before they will issue their machine. So, if you would like to feature POS services to a previous business or have another means of getting a machine, then, its not compulsory. On the opposite hand, it’s important you recognize Reasons why business registration is vital .

6. Apply for the POS Machine:
So many banks and other financial institutions issue out POS machines either on lease or on purchase. during this step, the selection of the bank to request for a POS machine will depend upon their eligibility requirements and also their commission and charges. Therefore, inspect the various institutions and choose on the one to figure with. to use for POS machine in any of the institutions, just walk into the customer unit or call your account officer and request for a POS. you’ll simply fill a form, affix your passport and provide other details counting on the institution and can need to go and await a minimum of 2 weeks to a month for the machine to be ready.

The most common issuers of POS machines are:

Zenith Bank mobile money agent
FirstMonie agent
Opay POS agent
Access Bank CLOSA agent
Quickteller paypoint agent
Ecobank Xpress point agent etc.
7. Install and begin services:
Once you get your machine, you’ll install it and check out to work and see if its working. Also, check the POS machine paper roll functionality. If everything works as supposed, then its time to boost your banner and begin trying to find your first customer.

Conclusion

POS business in Nigeria may be a lucrative one for people trying to find alittle business to start out . This business requires a touch capital, doesn’t occupy much place and is extremely easy to run. However, there are challenges to the business like Robbery, source of power and network. But on the end of the day , the business is worth trying because it markets itself.

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