Since the cashless economy started in Nigeria, it opened doors for entrepreneurs to launch Point-of-Sale (POS) businesses.
The Nigeria Inter-Bank Settlement System (NIBSS) reports that Nigerians spent ₦18 trillion via POS terminals in 2024—a 69% leap from ₦10.7 trillion in 2023—with transaction volume hitting 1.5 billion, up 8% year-on-year.
Statista also forecasts that the mobile POS market could reach US$42.68 billion by 2025.
This growth shows the increasing demand for POS services, especially in underbanked areas, making it a prime opportunity for you to step in.
Wondering how to seize this chance? This guide offers 10 proven tips to start and thrive in a POS business in Nigeria—perfect for entrepreneurs, small business owners, or anyone eyeing a lucrative side gig.
Understanding the Basics of a POS System
If you’ve ever wondered how a simple transaction turns into a secure, seamless process, that’s where a Point-of-Sale (POS) system comes in.
In simple terms, a POS system is much more than just a cash register.
It’s a smart solution that allows merchants to accept payments—whether it’s cash, card, or mobile money—quickly and securely.
By linking customers, merchants, and financial institutions, it transforms how payments are processed, making the whole experience smoother and more efficient.
Key Components of a POS System
To really get the most out of your POS business, it’s helpful to know what makes these systems work.
Here are the key components:
- Hardware Devices:
These are the physical tools you interact with daily. Card readers, touch screens, printers, and even cash drawers form the tangible part of your system, capturing and processing payment data. - Software Applications:
This is the brain of the operation. The software manages everything from processing payments to tracking sales and managing inventory. It ensures that data flows securely between your device and the bank. - Connectivity:
A robust internet or mobile network connection is crucial. Without it, the seamless transmission of transaction data to financial institutions wouldn’t be possible, which could disrupt the whole process. - Security Protocols:
In today’s digital age, security can’t be an afterthought. Advanced encryption and other security measures safeguard every transaction, protecting both the agent and the customer from fraud.
How a POS System Works
Let’s break down the journey of a typical transaction to see how it all comes together:
- Initiating the Transaction:
When a customer decides to pay, they either swipe, or scan their card (or use a mobile payment option) on your device. - Data Capture & Verification:
Your POS system captures the payment details and sends them off through secure, encrypted channels to ensure the data remains safe. - Authorization:
The system then contacts the bank or payment gateway to verify that funds are available and the transaction is legitimate. - Confirmation & Receipt Generation:
Once approved, your system confirms the transaction, and a receipt—either printed or electronic—is generated for the customer. - Settlement:
Finally, the collected transaction data is batched and sent to the bank for final settlement, completing the cycle.
8 Proven Tips to Start and Succeed in Your POS Business
1. Understand the Legal and Financial Requirements
To operate smoothly and legally:
- Documentation: Gather a valid ID (e.g., NIN), BVN, two passport photos, and two current account references.
- Business Registration: Register with the Corporate Affairs Commission (CAC) to comply with Central Bank of Nigeria (CBN) rules—essential for trusted providers.
- Startup Capital: ₦150,000 covers a basic setup, but ₦200,000–₦400,000 ensures a solid start with a machine, float, and branding.
2. Choose the Perfect Location
Location is everything:
- High Foot Traffic: Set up in markets, bus stops, or busy areas with limited banking access.
- Safety First: Pick well-lit spots and use a secure cash box for daily handling.
- Network Strength: Ensure reliable connectivity—crucial for seamless transactions.
3. Select a Reliable POS Machine Provider
Your provider choice shapes your success. While many options exist (banks, FinTech’s) today, consider a CBN-licensed platform like Supply Smart. Here’s why it stands out:
- Free SIM Cards with Unlimited Data: No extra data costs for agents—transactions run smoothly without interruptions.
- Yours for Life: Buy a Supply Smart POS once, and it’s yours—no target pressures or repossession worries.
4. Register with Your Provider
Register with a reliable POS provider and do the following:
- Submit Documents: NIN (or any other means of identification), BVN, CAC certificate (if needed), and proof of address.
- Timeline: Approval takes 1–2 weeks, though some fintechs speed it up to 24–72 hours.
5. Set Up Your Business Space
No need for a big investment:
- Options: Use a kiosk, small shop, or branded umbrella stand.
- Visibility: Add a “POS Here” sign—Supply Smart agents get branding support to stand out.
- Comfort: Keep it accessible and customer-friendly.
6. Market Your Services Effectively
Get noticed with smart moves:
- Extra Services: Offer bill payments or airtime sales—Supply Smart’s platform supports these extras effortlessly.
- Customer Service: Speed and reliability build loyalty.
7. Master POS Machine Basics
Operating is straightforward:
- Power Up: Charge and connect—Supply Smart’s unlimited data SIM keeps you online.
- Enter Amount: Input the transaction value.
- Payment Type: Choose card.
- Process: Follow prompts to complete.
- Receipt: Print or send digitally.
8. Troubleshoot Like a Pro
Handle hiccups calmly:
- Card Not Reading: Clean the card or reader.
- Payment Declined: Check the customer’s card or funds.
- No Connection: Rare with Supply Smart’s unlimited data, but restart if needed.
- Printer Issues: Ensure paper and connections are set.
Conclusion
Starting a POS business in Nigeria is easy if you have the right knowledge.
With a modest investment, a prime spot, and a focus on solving customer needs, you’re set for success.
Use these tips, pick a trusted POS partner, and start building your POS business. Goodluck!
Frequently Asked Questions (FAQs)
Q: How much does it cost to start a POS business?
A: Costs can vary depending on the scale of your operation. Generally, initial investments per device might range from ₦100,000 to ₦300,000 or more. It’s a good idea to shop around, compare suppliers, and factor in any additional fees like regulatory charges to get a clear picture.
Q: How do POS agents get paid?
A: POS agents typically earn their income through commissions on every transaction processed via their devices. These commissions are usually paid by banks or payment aggregators as a reward for broadening the electronic payment network.
Q: How much is the commission for POS?
A: POS commission rates often fall between 1-3% of the transaction value. However, these numbers can change based on your agreement with the bank, the transaction volume, or any special incentives available at the time. Always check the latest terms with your partner to stay updated.
