How To Start Pos Business In Nigeria
Starting a pos business in Nigeria is a way to make money and be a boss of your own. If you’re interested in this business model but don’t have knowledge on how to go about it, I got you covered. There are several steps and checkpoints you need to know about the business in order to open a successful pos business in Nigeria, which I’m going to review in this article.
1. Open a bank account.
Before you start pos business in Nigeria, you need to have a personal business POS bank account separate from your main bank account used for daily transactions. If you don’t have a business account yet, register one at the bank.
A- Visit the nearest bank in your area.
To open an account at a bank, you will be required to provide some details, which include your phone number, NIN (national identity number), date of birth, state, and capital. Provide the necessary and accurate information that’s needed by the bank for security reasons, so in the future you won’t encounter any issues.
This new bank account is what you will use to operate your business to receive, send, and deposit money to avoid complicating your personal money with business money.
Aside from that aspect, if you hire a worker later to help you manage the POS business, you will be able to monitor and do accounting more properly to avoid being cheated. Especially to avoid fraudulent activities of letting the worker steal your money to unknown place you can never find them. So many business owners have complained that their workers stole their business money.
If you create a business bank account separately, at least your business money and your personal money won’t be stolen at the same time when such unfortunate things want to occur.
When planning to open a bank account for your business, choose a bank that regularly has good service to avoid delays and complicated issues when you withdraw, transfer, or deposit money. This aspect is so important in business to avoid issues like money hanging in the air or late credit and debit alerts.
B: Open a savings account and upgrade it.
As a POS agent, you will always be doing transactions, accepting and sending money to customers whenever they order it, and this amount can sometimes be huge. Upgrade your bank account to make it eligible to receive a huge amount of money.
Limitation is by default set in every new and un-upgraded account, and once your account receives any money above its limitation, it will be blocked immediately. That’s why upgrading it is important. You can only upgrade your account at the bank.
C: Collect ATM Card
After you have opened the bank account, get an ATM card in the bank. You will need it to easily redraw money out of the POS machine and get the cash in the bank to continue the business or to confirm if any money that customers transfer has successfully been credited and is visible in your account balance. However, to get an ATM card, it will cost you a minimum of ₦1,000; the price varies depending on the bank.
D: Opens online banking app.
Online banking apps are known to receive money quickly. Now, most of the business owners use online banking to collect money from customers.
- Opay
- Palmpay.
People mostly use opay to receive money, aside from the POS machine.
2. Get POS machine (terminal)
You will need a POS machine to operate the business in order to be able to withdraw, transfer, and deposit money for customers. However, there are differentPOS machine terminals available that you can use to start the business.
Some of the popular POS terminals are:
- Paga POS Terminal.
- Opay POS Terminal[1]
- Moneypoint POS Terminal
- Verifone POS Terminal.
- Gtbank POS Terminal.
- Firstmonie POS Terminal.
- Quickteller POS Terminal.
- Palmpay POS Terminal, and so on.
However, it will cost you money to get a POS machine, and each POS terminal has a different price. I won’t be able to tell you the actual price at which you can get a POS machine because, at any time, the amount can decrease or increase, which will result in the wrong information.
3. Have cash for withdrawal and transfer.
You need capital to start pos business, this will be for withdrawal and transfer. However, the estimated minimum cash for a starter with little capital is ₦100,000. You need to fund your POS machine which will be used to transfer money for customers, while holding cash to give out to those who withdraw money.
In some cases, you can still ignore funding your POS wallet by only focusing on the cash with you. When they redraw, you will have cash in your POS wallet to do a transfer. But the cons of using small capital to start pos business is you will always run out of cash and might lose potential customers that want to redraw huge amounts of money, which will generate you a good profit.
If a customer wants to withdraw and you do not have the cash demanded, it’s better to tell them you run out of cash. If you say you don’t have that amount, they will take you as an unserious business owner, which might stop some of them from patronizing you again. Their might think can’t have the money they are demanding.
4. Do market research in your target location.
To start a business, you don’t have to do it in a hurry or just choose a location. There is some basic and important research to do that’ll help you find a good area for your business establishment. This will help in the long run, making you never regret your action and preventing you from wasting your money in a place that won’t give good results.
- In any location you decide to use, try to do market research to know the demand for POS service in that area.
- Look for those who normally need a POS service, which are retailers, small business owners, and individuals.
- Study how many there are in that area. If they are very much like a market, then you are lucky, for this will determine the rate of people that will patronize you.
- If they are not that much, you can decide to change the location or manage the area.
- Pos business can be operated in any place, but the safest place to open it is in an open area for security reasons.
5. Choose the option to operate a POS business.
Those who are into pos business use different means to start pos business in Nigeria. They use the following which are :
Shop
People establish businesses in shops; it is quite expensive to rent them, which depends on the area. If you have the money to rent a shop, go for it.
Road side
It’s also a good spot to do some business. To use this method, you will need to meet the person in charge of the area.
Market
People need to withdraw, deposit, and transfer in the market. It is also the best spot to do business.
Kiosk
Kiosk is the most popular place for people to do business in Nigeria. The benefit of the kiosk business is that it is able to fit any space you find in any location and is more affordable to rent a space. You will have to build a container, which will cost you money depending on the size.
Existing business
If you have an exciting business, you’re already operating. You can consider adding a POS business to it; it is the easiest way to start a POS business in Nigeria.
Note: Try and get a shop in a place where there is a good electricity supply, is secure, and is easy for customers to reach to patronize you.
6. Obtain the required license.
To get the necessary permits for your business, you can obtain them from the Central Bank of Nigeria (CBN) and other relevant regulatory bodies. You can also register your business with the Corporate Affairs Commission, known as the CAC, to create trust between you and your customers and to build and secure your brand.
7. Choose a name for your POS business.
To be easily recognized and to get others to promote your business to their friends and family, you need to find a name to give your business. The name is what you will be known for and called whenever they want to patronize or market your business to other people. This can boost your popularity in the community where your business is located.
However, to get a POS name, you can get it by using a stylish name or by using your personal name in a customized form. For example, mamatobi pos shop, page star, paga 99, and so on.
When creating a business name, there are rules you need to follow, one of which is to make the name easier to pronounce, spell, and remember.
If people are finding it challenging to pronounce the name, it might affect the business in a negative way. People prefer to patronize businesses built on brands.
8. Create a banner for your POS business.
Create a beautiful banner that will reveal the service you’re giving out in the POS business. This banner will include the following, which are:
- Your POS business brand name.
- Phone number.
- Picture of the POS terminal
- Other of your business
- Email address.
- etc.
You can create two banners, the first one for standing outside, to let people know they can redraw and transfer money to your place. And the other banner will be at the top of your shop for more appearance (if possible, add it there).
9. Get the necessary equipment.
The equipment you will need for your POS business will depend on how you want your shop design to be. Depending on you, you should purchase the things that will make your POS business stand out among others who are into the same business. The more it’s attractive, the better it will attract customers.
To make the business appealing, customize pos business in the form of a standard office to make it look like a legitimate bank alternative. If you build trust in your business, you will easily gain people’s trust to patronize you.
If you do not have enough money to spend on your business, you should only spend according to your power. Minimize your finances to ensure at least you start a business of your own. Then later on, you can advance it.
10. Lunch is your business.
Now that you know every step and every action that is required to start a business, you can set a special date to launch your business and start making money as a boss of your own. Be aware that on your day of launch, the POS business might not get as many customers as you expect it to. You should learn to exercise big patients and not to worry. Business takes time, and as time goes on, you will be recognized in the street and start getting enough people to patronize you.
If, unfortunately, the business is not going well due to the wrong targeted area, you can consider changing locations to have the best result for your business and to become successful in it. Aside from being patient to make things work gradually, you can boost things quickly by using the next step.
11. Hire workers
This option is up to you if you want to get workers to help you manage your business or not. But there are benefits and reasons why you may need staff for your business.
If you don’t have basic knowledge of operating POS terminals and how the business works, you can hire staff to help you do the work.
If you also want to expand your business by opening more businesses in different locations, workers will be needed for this to be accomplished, for you can’t be in different places at a time.
Workers help reduce the stress of running a business and give you a chance to face other things that are important to you.
12. Promote your pos business.
One of the most popular ways to market a business is through your mouth. It is a free and most effective strategy that works like charm. According to your POS business location, inform people basing in that street that you are doing POS business to make them aware a new pos business just launched. There are other strategies for promoting a business, such as using social media, paid advertisements, listing businesses on Google My Business, and the list goes on.
But using this means to advertise is not really important for a pos business owner to use. Pos business requires meeting customers one-on-one because you’re dealing with money. Try as much as possible to always let customers feel comfortable and satisfied, so they will always love to patronize your business again.
- You can achieve it by talking to your customer in a friendly way whenever they come for any of your services.
- Smile while talking to them.
- Ensure you remove the exact amount you’re being told to by the customers.
- Don’t allow gatherings of friends and families in your pos shop. Doing this will make people feel uncomfortable.
13. Maintain your customer and provide excellent service.
In your business, you need to be careful with your customers’ intentions because not all of them have good intentions toward you. If you’re not careful enough with them, they will scam you out of your money, which can affect your business if you’re not able to replace the lost money on time to keep operating the business.
Despite that, it doesn’t mean you should treat them in an arrogant manner; instead, maintain a positive relationship but be extra careful not to be scammed, resulting in losing money. Always provide good service for your existing customers to hold them and attract new ones to help your business grow from glory to glory, which I believe is what every business owner will ever want.
13. Charge according to others.
Every pos business owner charges their customers who want to withdraw or deposit, which is the following: Amounts plus the charge’s amount.
- From ₦100 to ₦5,000 = ₦100 charges.
- ₦5000 to 10,000 = ₦200 charges.
- ₦10,000 to ₦15,000 = ₦150 charges.
- ₦15,000 to ₦20,000 = ₦200 charges.
- ₦20,000 to ₦25,000 = ₦250 charges.
- And the list goes on.
If a customer wants to deposit, you can still collect lower charges because you’re receiving cash, which will help to continue operating the business. But if they want to redraw, collect the full charges, because you are giving out money.
14. Have a sales recording book.
As a POS agent, you need a sales recording book to record your daily sales. Get a book with a hard cover and a Biro. You can even keep POS agent receipts to go through them one after the other when less busy to monitor your business sales. This is important because some people can accuse you of cheating them, and through the record, you can defend yourself. However, this is how to make a sales record for pos business in Nigeria.
No. 1: trans type amnt commision Withdrawn: ₦1000
Ensure you’re recording every time you make sales accordingly to avoid confusion. It will make the calculation easier when done for the day. You will be able to monitor mistakes and errors.
15. Learn to do accounting after sales.
After making sales for the day, you need to do accounting, to know the total profit you made whether you encounter a shortage or not. Everyone has their own way of calculating their pos profits. According to the style that pleases you, try to always do a total calculation for your business to study growth. Every person has a different way of making calculations.
Note: Before starting the POS business for the day, write down the cash you want to use and the amount remaining in the POS wallet. Try to clear it off first to make the calculation easier. Use a smartphone or standard calculator to do your calculation; they hardly give the wrong details because you’ll clearly see what you’re typing.
16. Find people to get cash.
At any time, cash can run out of your hands while you haven’t gone to the bank. Network with other business owner’s that sell well, pos agents, and trusted friends’ making good income to help you with cash. You will send them the money into their account while they give you cash. This will reduce the stress of going to the bank regularly. Don’t allow cash for business to finish before having it with you to avoid losing customers.
17. Be cautious.
Most customers that come to patronize you don’t come with good intentions; they are there to cheat you of your money using trickle-down methods. Don’t be in a rush to answer customers; if they can’t be patients, you should let them go. Being in a hurry can make you commit mistake.
- Get serious when answering customers; avoid distraction. Until you’re done with your customers, you can do whatever.
- Before giving out money to customers, you should count the money twice. The first calculation might not be accurate. Just a second calculation can save you from giving out excess money. You don’t know an additional 1,000 has been added, which will affect that day business profit.
- Add water to your hand whenever counting money to ensure no mistake occurs. The water will separate the money from gumming each other.
- Don’t allow customers to tell you their bank account password. They can use it to tell you that you stole their money.
19. Carefully count money.
Whenever you’re given a huge amount of cash to deposit, you should take your time to count the money one after the other. Some of the money gathered might not be original. There might be fake money in between the cash. Or the total amount is not the exact amount they want to deposit.There is a woman doing POS in our area, they give her ₦50,000 cash to transfer it to someone. When she has successfully done the transfer for them, they go to their unknown destination. When she checked the money, one thousand notes were in the up and the down of the bundle money, but in the middle was ordinary paper and some fixed five naira notes.
20. Security
As a POS agent, be aware that you will be responsible for securing your customers dates and always making your POS terminal secure. Use best practices by securing data with encryption and a strong password.
21. Inform customers about your charges and fees.
When any customer wants to redraw or make a transaction with their card, let them know your charge amount before any action, and also ask where you should deduct your charges from their payment card or if they want to pay with cash. This is very important, for it can cause arguments and fights if care is not taken. And note, even if you have asked a customer about this before, when they come again, still ask them. Just always keep asking; their decision can change.
22. Regulations and Compliance
By starting a POS business, you need to always obey the Central Bank of Nigeria (CBN) regulations and requirements, including those of other regulatory bodies. These requirements and regulations are your customer (KYC) guidelines, transaction limits, and anti-money laundering (AML) regulations.
By always knowing the latest information in your business market and investing in quality technology to help ease your work and benefit growth, including providing excellent customer service to your customers, you can end up building a successful and profitable business that will keep fetching you money without a chance of failing at last.
Frequently Asked Questions for POS
Most of the questions asked by those who want to venture into business are answered here.
What is POS?
The full meaning of POS is that it is a device that customers and merchants in Nigeria use to perform electronic payments.
How does a POS work in Nigeria?
Pos terminal, through the internet, is connected to a payment processor. Whenever a card is inserted to make a payment, it reads the information on the card before sending the details to the payment processor. This processor verifies and authorizes the payment, and when this is done, it credits the merchant account.
What types of cards can be used with a POS in Nigeria?
It accepts any major international card or local payment card, as long as the card is issued by Nigerian banks. E.g., Mastercard, Visa, Verve, and Opay cards, etc.
Is it safe to use a POS in Nigeria?
Yes, it’s very safe, but ensure to be cautious when entering your pin or sensitive information from others. And also, the merchant should make sure the device is secure and updated to prevent hacking and the fetching of data.
Can I use a POS to withdraw cash in Nigeria?
Yes, you can redraw cash from any merchant that allows redrawing of cash. With your bank card, you can make a redraw to get cash.
Is pos business profitable in Nigeria?
POS business is profitable in Nigeria, especially when you’re in the area that is moving. Many people are using it to achieve different things in their lives; it is simple, easier to get started, and better than some jobs.
Learn : 11 Small Scale Business In Nigeria
How much can I make with the POS business?
You can make from ₦1,500 to ₦100,000 per day. But it solely depends on your business location and the total amount people withdraw on a daily basis. In the same way, it also occurs in other businesses.
How do I get a POS in Nigeria?
It’s not difficult; you need to contact a bank or their payment processor that gives out POS terminals, tell them you need a terminal, and then apply to get yours.
How much does it cost to get a POS in Nigeria?
There are different providers and types of devices; the price can’t be the same. Each POS terminal price varies from each other. A monthly fee or upfront fee and transaction fees may be required to be paid for the device.
What is the best POS terminal?
There is no best POS machine; the POS terminal that can be better today might not be working perfectly tomorrow, charge higher, have a poor network, and so on.
To know the best POS machine (terminal) that is working for others, you should check those that are into the business to see which of them they mostly use for their business. If they commonly use a particular POS machine, that likely means the POS terminal is favoring them and their business.
However, you can try others to see if they are better than the popular ones. Some companies are more ready to offer good charges that will benefit an agent. But they are not yet known to people.
Before agreeing to use a machine, ask for some important details, such as the charge’s rate, to avoid them reaping off your gain.
How much is required for me to start a POS business?
This depends on how big or small you want to start the business. You can start from ₦100,000 to ₦1,000,000, depending on what you can afford at the moment. Some people start with little capital and later increase it.
How do I troubleshoot POS issues in Nigeria?
While operating in your business, when every POS terminal develops any issue, try to call your POS provider or payment processor for assistance and to have the issue resolved.
Also note that in some cases this issue can be a common one; first confirm if it’s not connection problems, as the network can be bad sometimes, software errors, or hardware malfunctions before contacting an assistant. Now that you have read and know every step that is required to start a POS business in Nigeria, I believe you understand every aspect of it.
How do POS agents make money?
Pos agent makes money through the charges for transfers, deposits, and utilities bills.
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