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How to Start a Successful POS Business in Nigeria and Earn Daily Profits

Starting a Point of Sale (POS) business in Nigeria has become an attractive option for many entrepreneurs, offering a steady income and flexible hours.

With the increasing demand for quick and easy financial transactions, the POS business is thriving across Nigeria’s cities and towns.

In this comprehensive guide, we’ll look into all you need to know to start a successful POS business in Nigeria in 2024. This guide covers everything from the initial setup, the financial requirements, legal registration, and tips for long-term success.

What Is a POS Business?

A POS business involves using a POS machine to provide banking services like cash withdrawals, deposits, transfers, bill payments, and airtime sales to customers.

These services are especially useful in areas with limited access to banks or ATMs.

Why Start a POS Business in Nigeria?

The POS business in Nigeria offers several advantages:

High Demand: Many people rely on POS agents for their banking needs, especially in areas with few banks or ATMs.

Low Startup Cost: Compared to other businesses, the POS business does not require a huge amount of capital to begin.

Flexibility: You can run a POS business as a side hustle or a full-time operation, depending on your goals and available resources.

Step-by-Step Guide to Starting a POS Business in Nigeria

Step 1: Conduct Market Research and Create a Business Plan

Before starting any business, it’s essential to conduct proper research and develop a business plan. Look into:

  • Demand for POS services in your intended location.
  • Current competition and the number of existing POS agents.
  • Profit potential based on average transaction volume and fees charged per service.

Once you have this information, create a business plan that includes your goals, target market, and strategies for growth.

Step 2: Register Your POS Business with the Corporate Affairs Commission (CAC)

To operate legally, you must register your business with the Corporate Affairs Commission (CAC). This is an important step as it helps establish your business’s legitimacy and builds customer trust. Here’s what you need to do:

  1. Choose a Business Structure: Decide whether you want to register as a sole proprietor or a Limited Liability Company (LLC).
  2. Reserve a Business Name: Visit the CAC website to confirm the availability of your desired business name.
  3. Prepare Registration Documents: This includes forms like the Memorandum and Articles of Association (for LLCs), proof of identification, passport photographs, and proof of address.
  4. Submit Your Application: Complete the application process online or at a CAC office, pay the necessary fees, and collect your Certificate of Incorporation.

Having a registered business makes it easier to open a business bank account, which you’ll need to run a POS business effectively.

Step 3: Secure a Good Location

The location of your POS business is crucial to its success. Look for spots with high foot traffic and few ATMs or banks. Ideal locations include:

  • Busy marketplaces with a constant flow of customers.
  • Residential areas with many people who may not have access to banking services.
  • Student areas like university campuses, where students need quick access to cash and other financial services.

Security is also a critical consideration since you’ll be handling cash transactions daily. Choose a safe, well-lit location and consider installing security measures such as CCTV cameras.

Step 4: Raise the Necessary Capital

The initial investment for a POS business in Nigeria can vary depending on the scale of operations and your chosen location. Typically, the costs include:

  • POS Machine Cost: This ranges between ₦50,000 and ₦100,000, depending on the provider and machine type.
  • Shop Setup: While a full-fledged store isn’t necessary, you’ll need a desk, a couple of chairs, and a banner or signpost to attract customers.
  • Initial Operating Capital: Set aside funds for daily transactions, usually starting from ₦20,000 upwards.

You can raise capital through personal savings, loans from friends and family, or small business loans from microfinance banks.

Step 5: Apply for a POS Machine

After setting up your business, you need to apply for a POS machine. You can get one through:

  1. Fintech Companies: Fintechs like Opay, Moniepoint, and PalmPay provide POS services. Each company has its own application process and requirements.
  2. Commercial Banks: Many Nigerian banks such as First Bank, Access Bank, and UBA also offer POS services to registered agents.
  3. Microfinance Banks: Smaller banks may also provide POS machines.

Check the list of top POS service providers in Nigeria and their costs below

Consider the following when choosing a POS provider:

  • Transaction fees and commission structures.
  • Network reliability in your location.
  • Customer support services.

Fill out the necessary forms, provide your business registration documents, and wait for approval. The process can take anywhere from a few days to two weeks.

Step 6: Set Up Your Business Space

Setting up your POS business doesn’t require a huge shop or expensive décor. Start with:

  • A table, a chair, and an umbrella for shade.
  • A visible banner or signboard to announce your services.
  • Flyers or business cards for marketing purposes.

Ensure your space is organized and comfortable for customers to complete their transactions smoothly.

Step 7: Advertise and Grow Your Business

Promote your business using various strategies:

  1. Social Media Marketing: Use platforms like Facebook and WhatsApp to reach potential customers.
  2. Word of Mouth: Encourage satisfied customers to spread the word.
  3. Flyers and Posters: Distribute flyers in your local area to attract walk-in customers.

Consider offering additional services like bill payments, airtime top-ups, and more to diversify your income sources and build a larger customer base.

Potential Earnings and Profitability

The profitability of a POS business depends on the number of transactions you handle daily. For example, for a cash withdrawal of ₦10,000, you could earn around ₦100–₦200 per transaction.

With consistent customer traffic, your daily profit can accumulate significantly over time. Keep in mind that certain factors, like location and customer service, can greatly impact your profitability.

Top POS Service Providers in Nigeria and Their Costs

Starting a POS business in Nigeria involves choosing the right POS service provider that meets your business needs. Each provider offers unique pricing, features, and benefits. Here’s a detailed overview of the top POS service providers in Nigeria, their costs, and transaction fees to help you make an informed decision.

1. Opay POS

Opay is one of the leading POS providers in Nigeria, offering reliable services and low transaction fees. It is known for its competitive pricing and good customer service, making it a popular choice for many agents.

  • Cost of POS Machine: ₦40,000 – ₦70,000 depending on the type (e.g., Traditional, Android POS).
  • Transaction Fees: 0.55% per transaction for amounts below ₦20,000, and a flat fee of ₦100 for amounts above ₦20,000.
  • Additional Fees: Cautionary deposit of around ₦20,000–₦25,000 (refundable if the machine is returned in good condition).

2. PalmPay POS

PalmPay, established in 2019, is another major fintech company offering a variety of POS services. The platform is known for its cashback rewards and additional financial services.

  • Cost of POS Machine: ₦30,000 for a cautionary fee if rented, or ₦60,000 for full ownership.
  • Transaction Fees:
  • Deposits: 1.5% per transaction using wallet or bank transfer.
  • Withdrawals: N10 per transaction (₦5,000 and below), ₦25 (₦5,001 to ₦50,000), and ₦50 (₦50,001 and above).
  • Monthly Maintenance Fee: None.

3. Moniepoint POS

Moniepoint is a popular choice among POS agents due to its efficient service and low fees. It offers one of the best network coverages in the country.

  • Cost of POS Machine: ₦25,000 – ₦35,000 depending on the model.
  • Transaction Fees: 0.5% per transaction for withdrawals and deposits, with a flat fee of ₦100 for larger transactions.

4. Baxi Box POS

Baxi Box, developed by MFS Africa, offers flexible options for small business owners and agents looking to expand their services.

  • Cost of POS Machine:
    • Traditional POS: ₦10,000.
    • Android POS: ₦30,000.
  • Transaction Fees: 0.55% for amounts up to ₦20,000, and a flat rate of ₦100 for amounts above ₦20,000.

5. Kudi/Nomba POS

Kudi, now rebranded as Nomba, is another top POS provider known for its versatility and low transaction fees.

  • Cost of POS Machine:
    • Nomba Mini: ₦25,000.
    • Nomba Lute: ₦30,000.
    • Nomba Pro: ₦62,000.
    • Nomba Max: ₦85,000.
  • Transaction Fees:
    • 1.4% on Naira transactions.
    • 3.6% for international transactions.
    • A flat fee of N150 for large transactions.

Choosing the Right POS Service Provider

When selecting a POS service provider, consider the following factors:

  1. Transaction Fees and Commissions: Evaluate the percentage fee per transaction and any flat rates to understand your profit margins.
  2. Cost of POS Machine: Compare the initial cost of the machine and whether it requires a cautionary deposit.
  3. Network Reliability: Opt for a provider with a stable and fast network to avoid failed transactions.
  4. Customer Support and Additional Services: Consider providers that offer robust customer support, training, and value-added services like airtime sales and bill payments.

FAQs About Starting a POS Business in Nigeria

Here are some frequently asked questions (FAQs) about starting a POS business in Nigeria. These cover various aspects of the business, including startup costs, profitability, and legal requirements.

1. How much does it cost to start a POS business in Nigeria?

The cost of starting a POS business in Nigeria varies depending on several factors, such as the chosen location, type of POS machine, and initial capital needed for transactions. Typically, a new POS machine from a bank or fintech company can cost between ₦20,000 and ₦100,000. However, some providers, like Firstmonie and Access Bank, offer POS machines for free if you meet their requirements. Apart from the cost of the machine, you also need to consider the capital required for cash transactions, which can range from ₦50,000 to ₦150,000 depending on your target market.

2. What are the best locations to set up a POS business?

Ideal locations for a POS business include busy marketplaces, residential areas, student environments, commercial centers, and transport hubs. Choose a location with high foot traffic and limited access to banking services to maximize your profits. Avoid setting up close to ATMs or bank branches, as this could reduce your customer base.

3. What services can I offer with a POS business?

POS businesses in Nigeria offer several services, including cash withdrawals, deposits, money transfers, bill payments (e.g., electricity and cable TV), airtime purchases, and even bank account opening. Some providers, such as Paga and OPay, allow POS agents to facilitate BVN (Bank Verification Number) enrollments.

4. How do I get a POS machine in Nigeria?

To get a POS machine, you can either purchase it from a bank or fintech company. You will need to meet the provider’s requirements, which typically include providing a valid ID, BVN, business registration documents, and other personal information. Some of the top POS providers in Nigeria are Opay, Moniepoint, PalmPay, Firstmonie, and Baxi Box. Ensure you compare transaction fees and machine costs before making your choice.

5. What are the transaction fees for different POS providers?

Transaction fees vary across different providers. Here’s a quick overview of some popular providers:

  • Opay: 0.55% per transaction for amounts below ₦20,000 and a flat fee of ₦100 for higher amounts.
  • Moniepoint: 0.5% per transaction.
  • PalmPay: Deposits attract 1.5%, while withdrawals are charged at a fixed rate based on the amount (₦10 for small amounts and up to ₦50 for larger amounts).
  • Baxi Box: 0.55% for withdrawals and ₦30 for transfers.

6. Is the POS business in Nigeria profitable?

Yes, the POS business is generally profitable in Nigeria, especially in locations with limited banking infrastructure. POS agents make money through commissions on each transaction. On average, a POS agent can earn between ₦7,000 and ₦10,000 daily, depending on the location and customer base. This makes it a viable business opportunity, especially in underserved or remote areas.

7. Do I need to register my POS business with the government?

Yes, registering your business is recommended for legitimacy and credibility. Register your POS business with the Corporate Affairs Commission (CAC) and ensure you obtain a Tax Identification Number (TIN). This registration will help in opening a business bank account and enable you to access additional services and opportunities in the future.

8. How can I protect my POS business from fraud and security issues?

POS businesses are susceptible to robbery and fraud because they handle cash and customer data. Implement security measures like CCTV cameras, limit the amount of cash at your location, and be cautious about suspicious transactions. You can also opt for fintech companies that offer additional security features like fraud detection and encryption for customer data protection.


With this guide, you have all the information you need to start a successful POS business in Nigeria. Follow these steps, and you’ll be well on your way to running a thriving business that caters to the needs of your community.

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