It is also called agent banking business, and it’s an extension of the services offered by financial institutions to enable easy service offering to a good range of consumers .
OS (Point of Sale) business offers services like funds transfer and withdrawal, sales of airtime, bill payments like GOTV, DSTV, Startimes, PHCN, and other utility bills. it’s utilized in several places where goods and services are sold/rendered; places like retail shops, offices, supermarkets, fuel/gas stations, pharmacies, eateries, etc.
By creating quick access for financial transactions in several localities, the POS business has given individuals and business owners additional means of income. they’re sometimes called bank agents.
Although not serving as direct employees of a bank, they deliver banking services on behalf of banks on an agreed commission. it’s a profitable business and one among the simplest means of getting passive income.
Are you looking to start out a POS business in your locality? this text contains all the knowledge you would like to completely found out as a bank agent.
Basically, the POS business also referred to as agent banking began in 2013, after the financial institution of Nigeria released its guideline on the operations and management of the business. Since then, it’s remained one among the retail channels of several commercial banks to form their banking services reach an outsized number of individuals .
A banking agent owns and operates a retail outlet. He/she conducts the financial transaction and allows clients to deposit, withdraw, transfer funds, pay bills, recharge airtime, inquire customer’s account balance, and other related services.
It thrives more in rural areas, semi-urban centers, the unbanked and underbanked communities. it’s almost like the other remote banking channel. The banks equip the agents with point-of-sale (POS) card reader, mobile , barcode scanner, personal number (PIN) pads, pc , etc. they’re third party agents and may be an agent to as many banks as they will serve.
If you’ve got an existing small business that brings in cash on a day to day , you’ll diversify your revenue streams by venturing into the POS business.
How To Start POS Business In Nigeria
As I even have earlier stated, the POS business thrives more in rural areas or semi-urban centers; in places where there are not any banks, or few ATMs to serve the people. Hence, if you plan to venture into this business, the primary thing is to make certain that the amount of banks in your location cannot serve the community. This way, you’re of creating a profit.
In this article, I even have highlighted step by step plan on the way to start a POS business in Nigeria and therefore the basic items you would like to urge started.
Step 1: Have An Existing Business
The POS business has got to do with finance and must, therefore, be approached carefully. Besides, the financial institution of Nigeria is extremely particular about the business entities that qualify to be agents. So, extra care is taken by commercial banks before they authorise an agent for his or her retail banking.
To be eligible, you want to have an existing business operational a minimum of for a period of 12 months. Also, you want to have a store or office from which you use . Then, you want to are registered with the company Affairs Commission as any of the subsequent entities;
Limited Liability Company
Trusts or the other entity aside faith-based or NGOs.
As long as you’ve got any of the above requirement, doing a POS business or serving as a bank agent is feasible .
Step 2: Approach A Bank
Virtually all Nigerian banks allow agent banking services. So, as soon as you opt on the bank of your choice, subsequent thing is to approach the bank and obtain the small print of their requirement. The CBN guide allows being an agent for as many banks as you’ll serve.
You will got to fill some documents/agreement forms on the transaction conditions. Then, the bank reviews the appliance in line with CBN, internal criteria, and enters into an agreement with you, if you meet all criteria.
Also, you want to have an account for an immediate deposit for the aim of the business and supply some documents as a part of the wants for the proposal.
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Some of the specified documents include;
Valid means of identification e.g Driver’s license, National ID card, International passport or voter’s card.
2 passport photographs
2 accounting references
Evidence of business registration (CAC Certificate)
Tax number (TIN)
Memorandum and Article of Association.
Credit Bureau Report
A minimum capital of N50,000
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Step 3: Get The Equipment
Once your application to the bank has been considered, the bank then supplies the needed tools and equipment for the business. apart from the mobile , the subsequent materials are usually supplied by the bank:
Point of Sale Terminal; a transportable device that facilitates payments of products and services at bank agent locations using payment cards.
Barcode scanner to scan bills for bill payment transactions
Personal number (PIN) etc.
Step 4: Location
For you to thrive within the business, it’s advisable to settle on a location with limited banks or places with few ATMs. Also, choose strategic locations just like the stop , public market, event centers, etc. All of those factors will have much effect on your daily profit.
Once you’ve got an honest location, either construct a shed or shop but create enough spaces for swift movement for you and therefore the customers. Have a banner displayed at the doorway to point out the retail banking services you offer.
Then, for security measures, you’ll have a special purse/pouch around your neck or a secure with a robust lock to stop theft and burglary.
Also, if you notice that an ATM isn’t dispensing cash, you’ll go there to advertise your service. Some people there in need of money might subscribe your service.
Step 5: Render Services
The business is rendered through the utilization of POS terminals, card readers, mobile phones, and bank linked mobile wallets for real-time transaction processing.
As soon as you’ve got these, subsequent step is to start out providing the subsequent services;
Cash deposit and withdrawal
Funds transfer services (local money value transfer)
Bill payment (taxes, utilities, tenement rates, subscriptions, e.t.c)
Generation and issuance of mini statement
Cash disbursement and cash repayment of loans
Agent mobile payments/banking services
How It Works
In a POS business, the client first request transaction like withdrawal, transfer, or bill payment and presents the open-end credit . Next, the agent selects the sort of transaction on the POS terminal device and enters the amounts, then, insert the open-end credit into the device and ask the client to secretly enter the four-digit pin. Using the network, the overall Packet Radio Service (GPRS) connects with the bank’s server to authorize the transaction. When successful, it immediately prints out the receipt.
This process are often repeated for as many purchasers as you’ll , as long as you abide by the transaction rules of your host (bank).
The Importance Of POS Business
With a POS business, banks now reach a bigger demographic. Also, they provide more flexible and convenient access to existing and new customers. additionally , they make sure the safety of consumers and help reduce traveling long distances to possess access to banking. most significantly , it plays an enormous role in boosting financial inclusion especially to people in rural areas.
Also, the business has provided job opportunities and financial stability by helping the agent make money within the following ways;
Commission; Banks pay agents commission supported the quantity of transactions administered on their behalf.
Service Charges; By rendering service to customers, you’ll also charge them a specific amount especially on bills payments, taxes, and subscriptions.
Float; counting on your cash management policy, you’ll also make use of money deposits, net of withdrawal for your primary business.
By operating this business, you’re not only increasing your stream of income, but you’re also serving the requirements of the people in your community.
A POS business is a further way of getting income. apart from your existing business, it’s how to expand service offerings and one among the simplest methods to cross-sell your products/services to walk-in customers.
The business must situated in situ s where there are not any bank branches or busy environments with enough security measures in place. you’re bound to increase your daily revenue if you get everything right.
Are you considering this business or are you already a banking agent? we might wish to hear your thoughts within the comment. Please share this content together with your audience if you found it useful.