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These advantages have caused a boom in the POS business in recent times. If you’re in any of the country’s major towns or cities, you’re likely to find a POS stand or shop somewhere close to you. There’s still plenty of room for people who intend to start a POS business. It all comes down to finding the right location, i.e where there’s a demand for this service that isn’t being fully met. In this article, we’ll take you through the process of establishing a profitable POS enterprise. But first, let’s go over what this business looks like.
What Is The POS Business About?
The POS business involves using a Point of Sale terminal (i.e. POS machine) to process card payments on other people’s behalf. These payments range from money transfers to the settlement of utility bills. In Nigeria, POS merchants also help with money withdrawals, airtime top-up, and payments for products and services that a customer has purchased. Agents who provide this service are often part of the agent banking setup. They obtain some of the resources they need to start (such as the POS terminal) from the banks. Some payment companies also support agents. POS machines may be obtained from independent dealers as well. These agents earn by taking a commission on each successful transaction. If your business does well, you could rake in about ₦5,000 per day.Things To Consider Before Setting Up A POS Business
Have a thorough look at these things before you begin as a POS merchant.- The capital you’ll need to start. If you will be providing withdrawals alone, you may have a starting budget of about ₦150,000-₦200,000. But if you will be doing more, you may need at least ₦250,000 to begin.
- Your location is important. Set up in a place with a high demand for withdrawal and payments services that haven’t been fully catered for. These days, your best bet will be rural or semi-urban areas with few or no banks, where POS service is inadequate or non-existent.
- Security is crucial. You will be handling a lot of cash, so you’ll have to be sure that there’s adequate security where you’re at; or that the location isn’t bedevilled by criminal activity.
- Network quality is a deal-breaker for customers. Your POS machine needs to run on a reliable network. Find out what telecoms network provides the best service where you intend to set up and go with them.
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Steps To Setting Up A POS Business
You can take these steps to start a POS business:Raise Capital
Your funds should cover the cost of the POS terminal, shop or stand, and the cash you’ll need for customers who want to use your withdrawal service. The capital may come from your savings, family, and friends, investors, or any combination of these sources.Apply For Agent Status At A Bank
Visit your preferred bank to find out what requirements you should meet to become an agent. They may ask that you present a valid ID (National ID Card, drivers’ license, international passport, or voter’s card), BVN, passport photographs, Tax Identification Number (TIN), and evidence of registration with the CAC.Receive The Equipment You Need To Begin
When the bank accepts your application, they will provide you with items such as a POS terminal, card reader, bar code scanner, and PIN.Find The Right Location
We already touched on this. Go for a location that’s underserved by traditional financial institutions, and doesn’t have a lot of POS merchants already active. Security is important too, as are network availability and physical accessibility.Begin Providing Service
When you’ve set everything up, you’ll be ready to serve the customers that come your way. Have a business banner that’s visible from afar; distribute leaflets if possible; and offer great customer service. These early steps should combine to make your business successful.Final Words
The POS business will continue to thrive as long as there are people who want to access prompt payment services outside of the banks. The information we have shared in this article can aid your journey to become a profit-making POS merchant. Featured Image Source: SME360Got a suggestion? Contact us: editor@connectnigeria.com
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