POS business in Nigeria is becoming more popular by the day. More people are engaging in this business for several reasons. Asides from being pretty easy to set up, the POS business in Nigeria is also very lucrative.
The question that most people ask is, “how lucrative is the POS business in Nigeria?” This post will provide an answer to this question. It will also introduce you to the POS business in Nigeria as well as discuss how to start this business. Without further ado, let’s get started.
What is POS Business?
A good place to begin our discussion is to explain the POS business. POS stands for Point of Sale and it is a business that provides banking services to customers outside the bank environment.
Nigeria is blessed with several commercial banks, however, these banks don’t have branches in every location. Most rural areas are void of banks and are in dire need of providers of banking services. This need gave rise to what we know as the POS business in Nigeria today.
Originally, POS machines were designed to ease the stress of vendors, wholesalers, and retailers who needed to collect funds from customers without physical cash. However, banks soon realized the potential of these machines in alleviating the stress of the populace while providing profits. As a result, they came up with the idea of partnering with entrepreneurs to provide banking services through POS machines outside the banking environment.
Today, a POS business can provide the following services:
Open a bank account.
Enroll for BVN.
Deposit money into accounts.
Make bank transfers.
Endorse withdrawals from bank accounts.
Make bill payments including cable TV, power utility bills, and other important bill payments.
Purchase airtime and data, etc.
With these services, people no longer have to visit banking halls to carry out banking operations. You can simply step out of your home or office and sort out your banking processes easily.
How Lucrative is POS Business in Nigeria?
Have you ever wondered why we have so many POS businesses in Nigeria? When you walk through some streets, especially in urban areas, you will discover that there are several POS operators. People wouldn’t invest so much in this business if it wasn’t lucrative.
The POS business is one of the most lucrative small business ventures any entrepreneur can invest in today in Nigeria. You can begin this business with as little as N100,000 (considering the cost of application for the machine and bank requirements). Most POS operators, especially those in highbrow locations make between N10,000 and N20,000 profit every day. As long as you situate the business in a good location with a lot of human traffic, you should make considerable profit daily.
Worried about whether or not this business will still be lucrative in the nearest future? Here are a few reasons why you shouldn’t be worried:
People get to pay their utility bills through POS machines. Many of these people have no idea how to make such payments by themselves. Some of them don’t even know how to use their bank apps effectively. As such, they will always seek the help of POS operators to carry out this process.
Banking halls and bank ATMs are mostly crowded. Asides from being crowded, these areas experience poor network while most of the ATMs are unable to dispense cash. With the uncertainties that surround making a trip to the bank, most people prefer to stop by the closes POS agent.
Banks don’t have their branches in all locations. Most rural areas don’t have a single bank. If they have to conduct banking operations, they have to travel long distances to the closest town. This means they will end up spending extra funds on transportation and put their lives at risk on the road. Their only hope is to visit POS operators in their vicinity and pay the stipulated charges which will be far more affordable.
Nigeria has the highest population in Africa and our population is increasing at a very rapid rate. As long as there is an increase in population, we will continue to have more openings for POS operators. More people will keep carrying out POS transactions daily.
How to Start a POS Business in Nigeria
In this section, we will discuss how to start a POS business in Nigeria. Check out the steps below:
Write a detailed business plan
Many Nigerians consider business plans to be overrated because they don’t know the importance of this document. A business plan is a map that guides entrepreneurs on how to run their businesses. You should prepare one for your POS business before you start. Another key function of a business plan is that it helps the entrepreneur to raise business funds. Ensure that you carry out detailed research before you begin writing your business plan.
To start a POS business in Nigeria, you need between N100,000 and N150,000 depending on your location. You can raise these funds from personal savings or sourcing for gifts and soft loans from loved ones.
Choose your business location
Now that you have funds for your POS business, it is time to choose your location. When seeking a location for your business, consider the following factors:
A place with a lot of human traffic.
A location where people need the services of a POS operator.
The good thing is that you don’t have to rent a shop for this business. You can begin from your home, or with a table and umbrella in an open space.
Apply for the machine
Now that you have a location for your business, it is time for you to apply for the POS machine. You should check out different banks to find out their requirements and charges. Make your choice depending on what suits you best.
That’s it for how lucrative a POS business in Nigeria is. This post has explained the profitability of this business and how to start in Nigeria. Do you have any questions? Kindly drop them in the comment section.