No. 1 Guide to Start a POS Business in Nigeria

No. 1 Guide to Start a POS Business in Nigeria

The demand for convenient financial transactions in Nigeria has fueled a boom in the POS (Point of Sale) business sector.

If you’re an entrepreneur looking to tap into this lucrative market, this guide will provide a roadmap on how to start a POS business in Nigeria.

What is a POS Business?

A POS business involves providing financial services to customers using a POS machine. These services typically include:

  • Cash withdrawals: Dispensing cash to customers using their debit cards.
  • Cash transfers: Facilitating money transfers between bank accounts.
  • Bill payments: Enabling customers to pay utility bills such as electricity, cable TV subscriptions, and more.
  • Airtime and data recharge: Selling airtime and data bundles for mobile networks.

Why Start a POS Business in Nigeria?

Here are some compelling reasons to consider starting a POS business in Nigeria:

  • High demand: Limited access to bank branches and ATMs, especially in rural and semi-urban areas, creates a high demand for POS services.
  • Profit potential: POS businesses can be highly profitable due to the transaction fees charged for each service.
  • Low overhead: Starting a POS business requires relatively low start-up capital and operating costs.
  • Flexible hours: You can tailor your business hours to suit your preferences.

Read also: Is POS Business Profitable in Nigeria?

Requirements for starting a POS business in Nigeria

To start a Point of Sale (POS) business in Nigeria, you need to fulfill several requirements as outlined below:

  1. Valid Means of Identification: You will need a national ID card, passport, active driver’s license, or an international passport.
  2. Bank Verification Number (BVN): A BVN is required to authenticate customer identities.
  3. Two Current Account References: These references vouch for your financial reliability.
  4. Evidence of Business Registration: You need to provide proof of business registration, such as a certificate of incorporation.
  5. Physical Location: You should have a shop, kiosk, or market stall as your business location.
  6. POS Machine: Purchase a POS machine from banks or licensed providers.
  7. Working Capital: Ensure you have enough funds to cover operational costs.
  8. Other Requirements:
  • Passport photographs
  • Account number
  • Phone number
  • Business email address
  • Bank Verification Number (BVN)
  • Proof of business registration (CAC Certificate).

Once you have met these requirements and your application is approved, you will receive the POS machine and can start offering services to customers.

Starting a POS business in Nigeria is relatively straightforward and can be completed within two weeks to a month if you meet the host bank’s requirements.

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Steps on How to Start a POS Business in Nigeria

Follow these steps to start a POS business in Nigeria.

Step 1: Conduct Market Research

Before you dive in, research your local area to understand the existing POS presence and identify potential gaps in service.

Assess the competition, customer needs, and the best locations for maximum foot traffic.

Step 2: Capital Investment

While the POS business model has relatively low start-up costs compared to many other businesses, careful financial planning is still essential. Here’s a breakdown of the key areas where you’ll need to invest capital:

Essential Expenses:

  • POS Machine: This is the core of your business. The cost of a POS machine can range from ₦50,000 to ₦100,000 or more, depending on the provider and features. Some providers may offer leasing options or installment payment plans.
  • Shop Rental: If you don’t have an existing location, you’ll need to factor in the cost of renting a small shop or kiosk. Rental prices vary greatly depending on location and size.
  • Branding: Investing in a simple banner, signage, or flyers will help attract customers and make your business visible.
  • Initial Float: You’ll need enough cash on hand to facilitate customer withdrawals. Start with a reasonable amount like ₦50,000 to ₦100,000 and gradually increase it as your business grows.

Additional Considerations:

  • Security: Consider investing in security measures such as a lockable cash drawer, security cameras (if feasible), or insurance.
  • Furniture: You may need a simple desk and chair for your POS operations.
  • Power Backup: In areas with inconsistent power supply, budgeting for a small generator or inverter ensures minimal downtime.

Tips for Managing Capital Investment

  • Start small: Begin with the essential equipment and a modest float. Expand your services and cash reserves gradually as your business grows.
  • Negotiate: Don’t hesitate to negotiate with POS providers, landlords, or suppliers to get the best possible prices.
  • Consider used equipment: You may find good deals on lightly used POS machines to lower your initial investment.
  • Explore financing options: Some banks or financial institutions may offer small business loans or microcredit schemes.

Important Note: The capital you’ll need for your POS business in Nigeria can vary based on location, competition, and your chosen POS provider. Create a realistic budget and adjust it accordingly.


Step 3: Business Registration

Registering your POS business in Nigeria is vital for building trust, establishing legitimacy, and potentially opening doors for future growth or partnerships.

Here’s how to register your POS business with the Corporate Affairs Commission (CAC):

1. Choose a Business Structure

  • Sole Proprietorship: The simplest and most common option for small POS businesses. You are the sole owner and have full control over the business.
  • Limited Liability Company (LLC): Offers more protection for your personal assets as the business is considered a separate legal entity. This option may be more suitable if you plan on scaling the business significantly in the future.

2. Reserve a Business Name

  • Visit the CAC website (https://www.cac.gov.ng/) and conduct a name search to ensure your desired business name is unique and available.
  • Pay the required fee to reserve your chosen name.

3. Prepare Registration Documents

  • Memorandum and Articles of Association (for LLCs): This outlines the company’s objectives and internal governance structure.
  • Form CAC 1.1: The main application form containing your business details, directors’ or owners’ information, etc.
  • Proof of identification for owners/directors: Valid national ID, passport, etc.
  • Proof of address: Utility bill or bank statement.
  • Passport photographs

4. Submit Your Application

  • You can submit your documents at a CAC office or engage the services of an accredited agent to assist with the process.
  • Pay the required registration fees.

5. Collect Your Certificate of Incorporation

  • Once your application is approved, you’ll receive your official Certificate of Incorporation.

Additional Considerations

  • Tax registration: You’ll also need to register with the Federal Inland Revenue Service (FIRS) and your state’s tax authorities to obtain a Tax Identification Number (TIN).
  • Local permits: Check with your local government for any additional business licenses or permits required.

Why Registering Your POS Business is Important

  • Legitimacy and Trust: Customers are more likely to trust a registered business.
  • Opening a Bank Account: Most banks require registration to open a business account.
  • Legal Protection: A registered business has a stronger legal standing.
  • Access to Opportunities: Registration may be required to secure partnerships, loans, or participate in government programs.

Note: The registration process can take several days to a few weeks. It’s advisable to start the process early.

Step 4: Secure a Location

Choose a location with high visibility and foot traffic.

Here’s a list of top locations to consider when securing a location for your POS business in Nigeria:

Top Locations for POS Businesses

  1. Busy Marketplaces: Markets offer a constant stream of potential customers needing cash withdrawals, transfers, and other financial services. Look for markets with limited ATMs or bank branches nearby.
  2. Residential Areas: Position yourself within densely populated residential areas, especially those with middle to low-income earners who may rely heavily on POS services.
  3. Student Areas: Campuses, polytechnics, and areas surrounding universities are hubs for students who often need POS services for airtime purchases, bill payments, and cash withdrawals.
  4. Near Commercial Centers: Locate your business close to busy shopping malls, plazas, or areas with a high concentration of shops and businesses.
  5. Transport Hubs: Bus stops, motor parks, and petrol stations are places with a consistent flow of people who might need quick access to cash or other POS services.

Additional Factors to Consider:

  • Visibility: Choose a spot where your banner and signage are easily visible to passersby.
  • Security: Ensure the area is relatively safe and well-lit, especially if you plan to operate in the evenings.
  • Competition: Analyze the existing presence of other POS agents to balance the need for your services while avoiding oversaturation.
  • Accessibility: Customers should be able to reach your location easily.

Remember: The best location for your POS business also depends on factors specific to your area, so be sure to conduct some local research, including talking to other POS business owners if you can.

Resource: Latest Best Location for POS Business in Nigeria

Step 5: Choose a POS Provider

Many banks and financial institutions offer POS services in Nigeria.

Research and compare different providers based on their transaction fees, network reliability, commission structures, and customer support.

Some popular options include:

  • OPay
  • Paga
  • Firstmonie
  • Kudi
  • Moniepoint

Step 6: Obtain Your POS Machine

Once you’ve selected a provider, follow their application process to obtain a POS machine. You’ll typically need to provide:

  • Valid means of identification (National ID, passport, etc.)
  • Business registration documents
  • Bank Verification Number (BVN)
  • Passport photographs
  • Proof of address

Step 7: Set Up Your Shop (Optional)

Here’s a description of an ideal setup for your POS shop, keeping in mind security, functionality, and customer experience:


  • Size: Even a small kiosk or container-type shop can work well, provided the space is organized effectively. Aim for enough space for yourself, a small desk, and customers to queue comfortably.
  • Ventilation: Ensure adequate ventilation to avoid discomfort for yourself and customers, especially in warmer climates.
  • Visibility: If possible, storefront windows or a semi-open setup increase visibility and can attract more customers.

Equipment and Layout:

  • Desk: A sturdy desk provides a workspace for your POS machine, record-keeping, and cash storage.
  • Chair: A comfortable chair is essential for those longer operating hours.
  • POS Machine: Position the POS machine prominently for easy customer access and visibility.
  • Cash Drawer: A secure lockable drawer is vital for storing cash safely. Consider a cashbox with separate compartments for organization.
  • Power Source: Ensure you have reliable power outlets and, if necessary, a backup power supply like a small generator or an inverter for areas with frequent power outages.


  • Locks and Grills If your shop has a door or windows, invest in good quality locks and consider security grills for added protection.
  • Surveillance: A simple CCTV system can act as a deterrent and provide valuable footage in case of any incidents.
  • Limited Cash Display: Avoid keeping excessive amounts of cash on display to minimize the risk of attracting theft.

Branding and Ambiance:

  • Signage: A clear and eye-catching signboard with the name of your business and a list of offered services is essential (e.g., “XYZ POS: Withdrawals, Transfers, Bill Payments”)
  • Cleanliness: Maintain a clean and organized shop to create a welcoming atmosphere for customers.
  • Lighting: Ensure good lighting for both day and evening operations.

Additional Considerations:

  • Shade: If your setup is outdoors, consider a canopy or umbrella to provide shade from the sun for yourself and your customers.
  • Waste Bin: Keep a small waste bin for receipts and other litter.
  • Marketing Materials: Display flyers or promotional posters with information about your services and offers.

Remember: Even with limited space, a well-organized and secure setup adds professionalism and builds trust with your customers.

Step 8: Market Your POS Business

Let people know about your new POS business. Use eye-catching signage, flyers, and utilize social media for promotion.

Offer excellent customer service, building trust and encouraging word-of-mouth referrals.

Marketing Strategies for Your POS Business

  1. Signage and Branding:
    • Eye-catching Signage: Create a large, clear sign that prominently displays your business name, logo (if you have one), and the services you offer (e.g., withdrawals, transfers, airtime, etc.). Use bright colors and easy-to-read fonts.
    • Banners and Flyers: Place banners in strategic locations near your shop and distribute flyers in your target area to announce your opening and services.
  2. Word-of-Mouth Marketing:
    • Exceptional Customer Service: Provide friendly, efficient, and reliable service. Satisfied customers are your best advocates and will spread the word about your POS business.
    • Referral Programs: Offer incentives or discounts for customers who refer new clients to your business.
  3. Digital Marketing:
    • Social Media: Create pages for your business on popular platforms like Facebook, Instagram, and Twitter. Post regularly about your services, promotions, and customer testimonials.
    • Local Listings: Claim your business listing on Google My Business and other local online directories to improve your online visibility.
  4. Partnerships:
    • Collaborate with Local Businesses: Partner with shops, supermarkets, or other businesses in your area. Offer their customers POS services and promote their businesses in return.
    • Community Groups: Engage with community groups, associations, or religious institutions and offer your services during events or to their members.
  5. Promotions and Incentives:
    • Introductory Offers: Offer discounts or lower fees in your initial launch period to attract new customers.
    • Loyalty Programs: Reward repeat customers with points, discounts, or special offers.
    • Special Promotions: Run occasional promotions tied to holidays or special events.

Additional Tips

  • Networking: Build relationships with other POS agents and local business owners.
  • Appearance: Maintain a clean, professional appearance for your shop and yourself.
  • Consistency: Keep your operating hours consistent and reliable for customer convenience.

Marketing is an ongoing process.

Experiment with different strategies, track your results, and adjust your marketing efforts to find what works best in attracting customers to your POS business.

Resource: No. 1 Guide to Market POS Business in Nigeria

Tips for a Successful POS Business in Nigeria

  • Excellent customer service: Treat your customers with respect and address their concerns promptly. Positive customer experiences lead to repeat business.
  • Security: Prioritize security measures to protect your customers’ financial information and your own assets.
  • Maintain liquidity: Ensure you have enough cash on hand to meet withdrawal requests.
  • Record-keeping: Keep accurate records of your transactions for accounting and tax purposes.
  • Network reliability: A stable internet connection is crucial for seamless POS transactions.

Read also: How to Calculate Profit in Your POS Business in Nigeria


Learning how to start a POS business in Nigeria opens doors to a potentially profitable venture.

By following these steps, securing a suitable location, providing exemplary service, and effectively marketing your business, you can establish a thriving POS operation that serves your community and generates a solid income.

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