The POS business is one of the most profitable business ideas in Nigeria today. POS is an acronym for Point of Sale. This business involves dispensing cash to individuals after withdrawing it from their bank accounts. The POS business also allows the transfer of funds across accounts as well as payment of utility bills.
This business began to gain more popularity during the coronavirus lockdown. During this period, people needed funds but couldn’t go to the bank because of the lockdown. The demand for cash resulted in several POS stands cropping up all around the country. These individuals met the demand for a fee. In this post, we will look at how to start this business in Nigeria as well as the starting cost.
Starting Cost of POS Business in Nigeria
Wondering how much it will cost to start a POS business in Nigeria? Well, let’s be factual with you, there isn’t a specific starting cost. Your starting cost depends on the scale at which you want to run the business. The main capital you need for this business is the cost of the machine and the funds you’d be dispensing to your clients. This should be between N50,000 and N250,000.
Certain fintech companies offer free POS machines to entrepreneurs. However, they have specific requirements that you must satisfy to qualify.
Cost of POS Machine in Nigeria
What if you don’t want to go the route of fintech companies that offer free POS machines? How much will it cost to purchase a POS machine for your business? The cost of the machine is dependent on the company or bank that you want to purchase from or work with.
There is a fixed price for POS machines. Prices range from N45,000 to N75,000. In some cases, they are even as high as between N150,000 and N200,000. What determines the cost of the machine is its specifications and its different features. Part of the specifications includes the network support of the device. Some of the machines only support 2G and 3G while others support 4G. As you will expect, the latter will be costlier than the former.
List of POS Companies and Banks and Their Charges
When going into the POS business in Nigeria, you must be clear on the charges of the different service providers. There are certain hidden charges that you must be wary of. We have done some background work on your behalf to get some of the charges from these companies and banks. Check out the list below to find out:
- Baxi Box POS CHARGES
0.65% flat for withdrawals
N30 flat for transfer – no stamp duties
Payforce POS Charges
Withdrawals: (0 – N5000) = N30, (N5,001 – N16,500) = 0.6%, (N16,501 – N100,000) = N110, (N100,001 and above) = 0.11%
- Kudi POS Charges
Withdrawal: (below N4500) = N25, (N4,501 – N25,000) = 0.6%, (Above N25,000) = N150
- Paycentre POS Charges
Withdrawals: (0 – N10,000) = 0.55%, (N10,001 – N15,000) = N65, (N15,001 – N20,000) = N75, (N20,000 Above) = N80.
For transfers: (0 – N5,000) = N10.5, (N5,001 – N50,000) = N26.25 , (N50,000 and above) = N50.00
- Moniepoint POS Charges
Withdrawal: 0.5% (N1000 – N19900), 100 Naira Flat for (N20K – N1,000, 000)
Deposit: N12 Naira
- Kashzoo POS Charges
Withdrawals: N1,000 – N5,000 = N30, N5,001 – N10,000 = N45, N10,001 – N20,000 = N76, N20,001 – N40,000 = N85, N40,001 – N100,000 = N110, N100,001 – N200,000 = N150
- Kolomoni POS Charges
Withdrawals: N1000 – N19900 = 0.5%
Deposits: from N2000 and above = N100
Note that these prices may change depending on government and company policies. However, we will update this post once we notice any price changes.
Getting a POS Machine in Nigeria
Now that you know how much it costs to purchase a POS machine, there is a new question that we must answer. Where do you get a POS machine in Nigeria? As we have mentioned above, you can either purchase a POS machine from a bank or a fintech company. Some of the popular providers include:
- Access Bank CLOSA agent
- Baxi Box
- Ecobank Xpress point
- Firstmonie POS
- GTB POS
- Kudi POS
- Monie Point POS
- OPay POS
- Pay force
- Quickteller Paypoint
- UBA POS
- Zenith Bank mobile money agent
There are other providers but based on our research, we believe that these are the best on the market currently.
How to Start a POS Business in Nigeria
Just like it is for every business, there are certain steps that you should take when starting the POS business in Nigeria. Check them out below:
Feasibility study and business plan
Before you begin this business, you need to first carry out a detailed feasibility study. Check your immediate environment for how much it will cost to start the business. Make inquiries from different service providers and speak to other operators of this business. Doing this gives you a clear indication of what to expect. With your findings, you can come up with a business plan for your business.
Choose a location
The location of your new business determines to a large extent whether you will succeed or not. We suggest that you choose a location that has a lot of human traffic. Also, ensure that your environment is safe and free of hoodlums. Ensure that your location isn’t close to ATMs or banks so that you can enjoy lots of patronages.
From your feasibility study, you should have an idea of how much you need to start this business. It is time to raise the funds to begin the business. You can raise capital through several methods including:
- Personal savings
- Bank loans
- Loans from family members and friends
Submit your application
The application process to become a POS agent is slightly different from one provider to another. Find out what requirements you must satisfy from the provider you choose and submit your application. The process takes from between a few days to about a month. After doing this, you can start running your business.