Latest Best Location for POS Business in Nigeria (2024)

Point of sale (POS) systems have become an essential tool for businesses of all sizes in Nigeria.

As more transactions shift from cash to digital payments, businesses need secure, reliable POS solutions.

For entrepreneurs looking to launch a POS business in Nigeria, choosing the right location is key to success.

This article will discuss the major factors to consider when selecting your location in Nigeria for a POS business.

Table of Contents

Overview of POS business in Nigeria

The point of sale (POS) industry in Nigeria has seen rapid growth in recent years.

Spurred by government initiatives like cashless policies and growing consumer preference for digital payments, POS terminal deployment jumped from about 10,000 units in 2012 to over 500,000 terminals by 2019 according to data from the Nigeria Interbank Settlement System (NIBSS).

Transactions via POS terminals also surged from just N48 billion in 2012 to over N3 trillion by 2019.

Despite the impact of COVID-19, the POS industry is projected to continue growing at over 50% annually.

Factors driving this growth include:

Rising mobile and internet penetration – With over 204 million mobile subscribers and 123 million internet users, more Nigerians are embracing digital payments which is fueling POS adoption.
Government backing – Policies like the cashless initiative and financial inclusion goals set by the Central Bank of Nigeria (CBN) are catalyzing POS uptake.
Youth population – With over 60% of the population under 30, tech-savvy millennials and Gen-Z are increasingly using POS for everyday payments.
Expanding middle class – The gradually expanding middle class with higher purchasing power is contributing to POS adoption.
COVID-19 shift – The pandemic has accelerated cashless payment adoption for safety reasons.

While Lagos presently has the highest number of POS terminals, the equipment is spreading to other cities as the appetite for digital payments increases.

This rapid growth makes the POS industry attractive for entrepreneurs.

Understanding the Nigerian POS landscape provides insights into ideal locations for launching a successful POS business.

Factors to consider when choosing a location

Selecting the right location is critical when starting a POS business in Nigeria. There are several key factors entrepreneurs should consider when choosing where to establish their POS operations:

Infrastructure

Reliable electricity supply – Since POS terminals and networks rely on power, choose locations with relatively stable electricity. Places with higher generator usage can increase operating costs.
Internet and mobile networks – Good internet via broadband and strong mobile networks like 3G/4G are vital for seamless POS transactions. Prioritize areas with solid connectivity.
ATM density – Higher ATM concentration boosts cash availability for bank transfers to customer accounts during POS use. Locations near ATM hotspots are preferable.

Consumer Base

Population density – Areas with higher populations provide a bigger client base. Focus on commercial cities and densely populated neighborhoods.
Youth population – Younger demographics are often early POS adopters. Locations near universities and youth hotspots like entertainment zones offer potential customers.
Banked population – Target locales with higher percentages of the banked population who can readily use POS terminals.

Business Ecosystem

Commercial activity – Busy commercial areas with lots of shops, markets and trader traffic provide natural POS user bases.
SME density – Locations with many SMEs and startups are suitable for POS adoption by local businesses.
Industry/office concentrations – Areas around business parks, industries and corporate offices have healthy sales potential.

Best cities for POS businesses in Nigeria

When starting a POS business in Nigeria, setting up the right physical location and storefront is key for attracting customers.

Based on the information gathered from various sources, the best cities for Point of Sale (POS) businesses in Nigeria are as follows:

Lagos: Lagos has the largest number of POS agents in Nigeria, with 322,266 agents, accounting for 21.4% of all POS agents in the country. It is Nigeria’s economic and population center, making it an ideal spot to start a business in various fields.
Abuja: As Nigeria’s capital, Abuja has experienced significant economic growth and is suitable for establishing businesses in government contracting, education, or healthcare.
Ibadan: Ibadan, Nigeria’s third-largest city, is a significant business and industrial center, making it a great place to start a manufacturing, agribusiness, or trading business.
Kano: Kano, Nigeria’s second-largest city, is a major business and industrial center suitable for starting businesses in manufacturing, trading, or agriculture due to its large population and proximity to neighboring countries.
Port Harcourt: Port Harcourt serves as an essential oil and gas hub, making it an excellent location for firms in the oil and gas industry and related sectors like construction and logistics.
Benin City: Benin City has a thriving economy with easy access to important marketplaces due to its proximity to Port Harcourt and Lagos. It is suitable for agricultural, manufacturing, and educational businesses.
Warri: Warri is a major Nigerian energy hub with numerous opportunities in the energy sector due to its proximity to oil and gas production. It is ideal for businesses in energy-related industries like construction and logistics.
Jos: Jos in Plateau State offers opportunities in various sectors and industries. It is known for its tourism potential and picturesque landscape, providing opportunities in agriculture, tourism, and education.
Onitsha: Onitsha is a significant business and industrial center known for its bustling marketplaces. It provides opportunities in trade, business, and entrepreneurship due to its vibrant business climate.
Aba: Aba in Abia State is Nigeria’s premier manufacturing center known for textiles and footwear industries. It offers opportunities for entrepreneurs interested in manufacturing businesses.

These cities offer diverse economic activities, infrastructure support, market access, and industry-specific advantages that make them conducive for starting POS businesses or other ventures in Nigeria.

Here are some tips for an ideal POS outlet:

Visible and Accessible Location

Choose a spot with high human traffic, such as near busy roads, markets, commercial areas, motor parks, malls or public transport hubs. Avoid obscure backstreet locations. Being easily noticeable and accessible gets you walk-in patronage.

Neighborhood Safety and Security

Select areas with historically low crime rates. Avoid dangerous neighborhoods prone to robberies which can risk loss of POS terminals and cash. Engage local security.

Branding and Signage

Invest in proper branded signage, decor and storefront visuals. This entices passersby. For example, place window stickers or glow signage indicating “POS Services Here”.

Space and Layout

Secure a well-sized space from 60 to 150 sq ft. Optimize layout for customer flow. Have a waiting lounge with chairs given potential queues during rush hour.

POS Counter Design

Have a dedicated counter for the POS terminal, printer and accessories. showcase brochures. Position the counter near the entrance with staff access.

Lighting and Ambiance

Proper lighting ensures visibility. Avoid dark dingy ambiance. Use accent lighting to create warmth. Neat orderly interiors project professionalism.

Infrastructure

Setup stable power via generators or inverters to run equipment. Have internet access via routers, modems and data bundles. Install security cameras and alarm systems.

Parking

Ideally have dedicated parking spots for customers. Nearby public parking like mall lots also works. Parking ease encourages patronage.

With the right storefront and location, you can attract more POS customers while also providing convenient services.

This builds your reputation and referral traffic. Leverage professional location scouts or agents to find optimal retail spots for your POS outlets in target Nigerian cities.

Setting up the physical storefront

Launching a successful POS business requires more than just finding a commercially viable location.

Entrepreneurs must also pay attention to factors like security, availability of support services, infrastructure and competition to maximize the potential of their chosen location.

Security

Nigeria has security challenges ranging from petty theft to violent crimes. To protect your business:

Choose locations with lower crime rates and active neighborhood watch programs
Hire trained security guards and install CCTV surveillance
Get intruder alarm systems, motion sensors and reinforce doors/windows
Subscribe to area security patrol services where available
Maintain membership of trader/business associations for collective security
Avoid late night hours of operation in risky areas
Keep minimal cash on site and make frequent bank deposits

Support Services Access

To operate smoothly, ensure proximity to:

Technical support: POS terminal issues require swift tech assistance from vendors or computer repair shops.
Cash points: Routinely need to deposit cash and get change. Thus, access to nearby banks or ATMs is key.
Power infrastructure: For constant electricity, proximity to power infrastructure like substations helps when using generators.
Internet services: Fast and reliable internet enables real-time POS transactions. Choose areas with good broadband coverage.

Competition Check

Study your competition. While some nearby POS outlets indicate consumer demand, too much competition can undercut you. Balance proximity to other POS services – not too near but not too isolated.

Business Registration & Licensing

Formally register your business and obtain necessary licenses from the Corporate Affairs Commission and state agencies. This legitimizes your POS operation.

Selecting a location with holistic support facilities, security, infrastructure access and balanced competition enables you to maximize the potential of your chosen area. Conduct due diligence before committing to a spot.

Additional considerations like security and infrastructure

Here are some additional tips for choosing the best location for your POS business in Nigeria:

Future Development Prospects

Look ahead at an area’s future growth and expansion plans to assess long-term suitability. Is it a designated upcoming commercial zone with major infrastructure projects that will attract more businesses? Prioritize such localities.

Rental/Purchase Costs

Balance establishment costs against revenue potential. Avoid overpaying rent or property cost just for a “prime” location if the area’s sales opportunity does not justify it. Seek cost-friendly locations.

Ease of Commuting

Pick areas where your target customers live or work to increase foot traffic. Is it easily accessible via major roads and public transport? This aids patronage. Avoid isolated hard-to-reach places.

Geographic Spread

If opening multiple outlets, avoid clustering them. Strategically spread them across different districts, neighborhoods and cities for wider coverage. This increases overall catchment area.

Compliance Checks

Verify land titles and consider zoning regulations, local council requirements, environmental impact rules etc to avoid problems later. Ensure location suits all compliance needs.

Research Precedents

Learn from your competitors’ location choices. Identify which spots garner success in your target city. Their real-world experiments reveal winning locales.

Test the Location

Trial the potential location with makeshift stalls for a few days before fully setting up shop. Gauge customer interest and reveal any problems early. Fine-tune accordingly.

Future Expansion Scope

Assess if the space offers room to expand later by taking adjacent spots when business grows. This helps avoid relocation overheads in future.

Investing time to thoroughly evaluate locations using these tips helps entrepreneurs maximize their chances of success.

Check all critical location aspects before fully launching your POS outlet.

Key Takeaways

Here are key takeaways from this article on choosing the best location for POS businesses in Nigeria:

Consider infrastructure factors like electricity, internet, mobile networks and ATM access which facilitate POS transactions.
Target areas with high population density and youth demographics who readily use POS services.
Focus on commercially active neighborhoods and business concentrations to get customer traffic.
Invest in proper signage, space, layout, counter design and visual branding for the physical store.
Prioritize security right from the evaluation stage given Nigeria’s safety issues.
Ensure proximity to support services like technical assistance, cash points and power infrastructure.
Study competition intensity and balance costs against revenue potential for the location.
Check for future growth prospects, ease of commuting and geographic spread.
Verify compliance issues and research location choices of successful competitors.