10 tips on POS business: How to startup the right way

10 tips on pos business : how to startup the right way

Getting POS (Point of Sale) business – Launching your own business can be a very enriching experience, but it must be stated clearly: it is not for everyone , some people work better working in a dependency relationship.

Do you want to become independent because you want to have better use of your time? Do you want to be your own boss? Do you want to earn more money?

Whatever the reasons that drive you to embark on this adventure, you must first understand the challenges it entails, as well as know what to expect. Ultimately it is about knowing if you are an entrepreneur .

POS business, also referred to as agent banking business is an extension of the services offered by financial institutions to enable easy service offering to a wide range of customers.

The rise of the POS business in Nigeria is therefore as a result of people’s quest to live life more conveniently, through easy access to financial services.

Point of sale accepts debit/credit cards the same way ATM does and as such,
it offers a wide range of varying services such as funds withdrawal and transfer, sales of airtime, utility bills payment such as GoTV, DSTV, Startimes, PHCN and the likes.

It is mostly used in places where goods are sold or services rendered, places like super Markets, retail shops, offices, filling or gas stations, pharmacies, eateries, just name it.

However, it thrives more in rural areas, semi-urban centers, the unbanked and underbanked communities. It is thus, more profitable in communities with no banks and places where ATMs are not enough to serve the financial needs of the community.

Although Point of sale operators are sometimes called bank agents, they are not serving as direct employees of the bank. They however deliver banking services on behalf of the banks on an agreed commission.

By simply creating easy access to financial transactions in varying locations, the agent banking business has afforded business owners and individuals an additional and reliable source of income.

The point of sale business began basically in 2013, following the release of the guidelines on the operations and management of the business by the Central Bank of Nigeria (CBN).

It has thus remained one of the retail channels of various commercial banks in the country to extend their bank services to a large number of people.

How to get POS Machine for Business

how to start a pos business

A POS operator owns and operates a retail outlet where he conducts the financial transactions and enable clients to either withdraw, deposit, transfer funds, pay bills, recharge airtime, or carry out other related services and he can either acquire a POS machine through banks or agency banks.

They are third party agents and can be an agent to as many banks as they can serve.

The banks equip the agents with point-of-sale (POS) card reader, mobile phone, barcode scanner, personal identification number (PIN) pads, personal computer, etc.

However, in a case where you don’t want to collect the pos machine from bank(s), you can purchase from companies that are licensed to sell them. There are registered aggregator with CBN licensed PTSP (issuers of pos terminal in Nigeria).

It is worthy of note that POS machine varies in price depending on the agency company that is selling and the specification of the point of sales machine in question. It may thus be a 2G, 3G, or 4G POS machine. The price therefore ranges from as low as 45,000 to as high as 200,000 naira.

How To Start A Successful POS Business In Nigeria

As already noted, the POS business tends to thrive more in rural areas or semi-urban centers. That is, in places where there are no banks or few ATMs to serve the people.

This strategy and others explained below will give you a head start on how to make the most of this lucrative business venture.

See also : How to make money by watching tiktok videos

1.) Have an existing business / sales point

The Central Bank of Nigeria is very particular about the business entities that qualify to be agents. As such, extra care is taken by commercial banks before they authorise an agent for their retail banking.

To be eligible therefore, you must have an existing business in operation at least for a period of 12 months. You must also have a shop or office from which you operate.

More so, you must have been registered with the Corporate Affairs Commission as any of the following entities;

• Limited Liability Company
• Sole Proprietorship
• Partnership
• Cooperative Societies
• Public Entities
• Trusts or any other entity aside faith-based or NGOs.

Starting a POS business or serving as a bank agent is possible and easy once you meet up with the above requirements.

how to start a pos business

2.) Approach a Bank

Virtually all Nigerian banks allow agent banking services and luckily, the CBN guide allows being an agent for as many banks as you can serve.

You’re thus at liberty to decide on the bank(s) of your choice and approach same to get the details of their requirements.

Basically, you will need to fill some agreement forms / documents on the transaction conditions. After which, the bank will review your application in line the CBN and internal criteria as well and then enter into a binding agreement with you if you meet all requirements.

More so, you must have an account for a direct deposit for the sole purpose of the business and also provide some documents as part of the requirements for the proposal.

Some of the required documents include;

• 2 passport photographs
• Valid means of identification e.g Driver’s license, National ID card, International passport or voter’s card.
• Bank verification number (BVN)
• Evidence of business registration (CAC Certificate)
• Tax Identification Number (TIN)
• 2 current account references
• Memorandum and Article of Association.
• Credit Bureau Report

The Banks to get the POS machine are as follows;

• Zenith Bank,
• First Bank,
• Access Bank,
• Ecobank,
• Skye Bank,
• Fidelity
• Diamond bank etc.

The different banks have their own specific requirements and mode of operation, as such you to make your choice and go to them to get the details of what is required.

3.) capital to start a pos business

It does not cost much to start a Point Of Sale business in Nigeria. A minimum working capital of N50,000 is required for payment of withdrawal orders and for miscellaneous expenditures.

You would as well need money for the payment of shop rent if you’re using a rented shop.

4.) Acquire the equipment

Usually, you would get the equipment needed for the agent banking business under 14 days.

Aside from the mobile phone, the following materials are usually supplied by the bank once your application to the bank has been considered.

The needed tools and equipment thus provided by the bank(s) for the business includes;

• Point of Sale Terminal; a portable device that facilitates payments of goods and services at bank agent locations using payment cards.
• Card reader
• Barcode scanner to scan bills for bill payment transactions
• Personal identification number (PIN) e.t.c

5.) Best location for pos business

It is advisable to choose a location with limited banks or places with few ATMs. More so, it is recommended that you choose strategic locations like the bus stop, public market, event centers, etc.

All of these factors will have much effect on your daily profit and will enable you to thrive in the business.

It should thus be a place that is visible and accessible because increase in the number of patronizers means increase in profit.

Once you have selected a good location, get a banner displayed at the entrance to show the retail banking services you offer. More so, ensure there is enough space for swift movement for you and your customers within the shed or shop.

For security measures, it is highly recommended that you get a safe with a strong lock to prevent theft and burglary.

6.) Render services

Once the bank has provided you with the requisite tools used to render the agent banking business services, such as the POS terminals, card readers, mobile phones as well as bank linked mobile wallets for real-time transaction processing, the next notable step is to start providing the following services for customers viz;

• Cash deposit and withdrawal
• Funds transfer services (local money value transfer)
• Bill payment (taxes, utilities, tenement rates, subscriptions, e.t.c)
• Balance inquiry
• Generation and issuance of mini statement
• Cash disbursement and cash repayment of loans
• Agent mobile payments/banking services.

How does POS Business work?

how to start a pos business

In the POS or agent banking business, the client would first request for transactions like withdrawal, transfer, or bill payment and present his/her debit card.

Next, the agent selects the requested type of transaction on the POS terminal device and enter the amount then, insert the debit card into the device and ask the client to secretly enter the four-digit pin.

Using the network, the General Packet Radio Service (GPRS) connects with the bank’s server to authorize the transaction. When successful, it immediately prints out the receipt.

This process can be repeated for as many customers as you can, as long as you abide by the transaction rules of your host (bank).

How Profitable is POS (Point Of Sale) Business?

There is much profit in POS business because it involves rendering varying services which are in high demand.

Not only are the services in high demand, the consumption of the said services will always be needed and luckily, the POS business is not yet crowded.

The POS operators or agents make money in the following ways;

1.) Commissions – Banks pay agents commissions based on the volume of transactions carried out on their behalf. The money you make from commissions; banks and cable is enough to enable you attain some level of financial freedom.

2.) Service Charges – By rendering service to customers, you can also charge them a particular amount especially on bills payments, taxes, and subscriptions.

The bank charges you receive is not directly from you but your customers. As such, you have nothing to lose but much to gain.

However, you have to charge according to bank commission or it should guide your charges.

3.) Float; Depending on your cash management policy, you can also make use of cash deposits, net of withdrawal for your primary business.

Benefits of a POS System in your Business


1.) It plays a big role in boosting financial inclusion especially to people in rural areas.

2.) With a pos business, banks now reach a larger demographic.

3.) It gives instant notification/confirmation of goods and services payment.

4.) It reduces the stress of carrying cash around thereby ensuring the safety of customers.

5.) More so, the business provide job opportunities and afford small busines owners the opportunity to diversify their revenue streams.

What to consider before starting a business

Launching your own business can be a very enriching experience, but it must be stated clearly: it is not for everyone , some people work better working in a dependency relationship.

Here’s a guide with some important questions to ask yourself before getting started. Are you ready to start your own business? Let’s see…

1. Do you have enough money to get started? If you don’t have enough money to cover your needs for the first six months (at least), your chances are not great. 

You need money for your subsistence and that of your family while you wait for your business to start generating income.

Sometimes there is no choice but to withdraw money from the business to live, but it is not the most advisable thing to do. 

A business that is started needs a flow of money to develop, the ideal is to be able to reinvest the money that comes in.

2. How do you know if there is a market for the product or service you want to offer? You must do market research and make sure that people are willing to buy the product or service you plan to offer and at the price you plan to offer it.

3. Do you think you can start your business part time? In this way, you could keep your current job and earn a regular income while you develop your business. If your current job is full time, you can explore changing to another that requires less time and even if your income decreases, it will leave you time to start organizing your business.

4. Do you have a business plan ? If you don’t have it, you should make one as soon as possible. 

We have already said it, the business plan helps to think about the company, to present it to third parties in case you need funds (a bank or an investor) and offers a roadmap that will guide your steps and help you to re get on track if you deviate from the path laid out.

5. Can you wait 3-5 years before you are successful? This is the time that is usually required to successfully develop a company, so you have to be willing / or be patient.

6. Are you a specialist in your business? Are you known in the community? If this is the case, you could have important advantages to sell your ideas, obtain financing and attract clients. 

If this is not the case, you will have to work harder to make yourself known.


If you have been looking for opportunity to earn money through Point Of Sale business in Nigeria, an opportunity has thus presented itself.

No doubt, It is a nice business idea you should consider doing as an entrepreneur. You can as well venture into it as a side hustle which is now seen as the new job security and diversify your income streams.

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