The whole world, including Nigeria, is trying to go cashless. As a result, POS machines are now appearing in every Nigerian area to make payments easy and safe. You can also expand your business with a POS machine, and here is how to do it.
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1. What is a POS business?
POS, or Point of Sale machines, are now being used by more and more businesses. Their primary use is to accept payments for goods and services the customer purchases at a store, hence the name. However, POS machines are also widely used for bank transfers, bill payments, recharging airtime, paying rent or taxes, and other financial needs that can be difficult to access in other ways in rural areas where banking is not yet developed enough. As a POS machine owner, you become a banking agent and you make money through service charges and commission from the bank you are cooperating with.
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2. Who can start a POS business?
The important thing to know about a POS business that you already need to be a business owner to qualify as a POS banking agent. The Central Bank of Nigeria has strict requirements for the applicants and you need to run a successful business for more than 12 months prior to the application. Typical businesses where you can open a POS service include stores, gas stations, food joints, offices, and pharmacies.
The location of your business means a lot for the success of your POS operation. The ideal place to start a POS business is an area that is underserviced by banks, does not have a lot of ATMs in close proximity, but does have a lot of foot traffic. That way, your POS spot can become the go-to place for people to make all kinds of payments, and the more people use your POS machine, the more money you will eventually make.
3. Choose your bank
Right now, every major Nigerian bank is prepared to work with individual businessmen as banking agents, but each bank has a list of requirements for the applicants. Plus, the Central Bank of Nigeria also regulates the work of banking agents and may have its own requirements for prospective agents. Ideally, you need to choose a bank that is relatively easy to get to, offers generous commissions for its agents, and doesn’t make it too hard for the applicants to join the POS business.
4. Complete your application
After you have asked your bank of choice for the requirements, it’s time to prepare for your application. Depending on the bank you are working with, the list of documents required for the application may differ, but the most commonly requested documents include:
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- National ID card, driver’s license, or another official means of identification
- Evidence of business registration, e.g. a CAC certificate
- Two current account references
- At least ₦50,000 of working capital
- Two passport photographs
- Bank Verification Number
- Tax Identification Number
5. Gather the equipment
If the bank reviews your application and accepts you as a new banking agent, the bank will then supply you with all the necessary equipment and assist with its installation in the store. The POS equipment you will need includes:
- POS machine
- PIN keypad
- Barcode scanner
- Card reader
You may also need a separate mobile phone for POS operations, and if so, you will likely need to purchase it yourself.
6. Deliver the services
When everything is ready and you are all set for rendering POS services, make sure to inform your customers, either with a personal announcement when they visit your store or by using ads outside of your shop or online. People will always patronize a POS business if it delivers services fast, is safe to work with, and does not charge exorbitant service charges. By keeping your charges affordable, you will attract a greater number of customers, who, at the end of the day, will give you a bigger profit.
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