Business Activity || Point Of Sale (POS) Business: Everything you should know about and how to establish it in Nigeria
POS business have become a popular means of generating incomes in Nigeria after it escalation in 2020 due to COVID-19 lockdown which affected banking sector too.
Many people have venture into the business and maintain profit all through while others have experienced loss. The difference between loss and profits is not as result of lack of seriousness but certain factors that where not considered during it establishments. Furthermore, many people do have a knowledge of the business. In this post, I’ll discuss everything about POS business in Nigeria.
How profits are made
On average, a POS agent that operates in a nice environment can generate at least N5000 profits daily. An amount that is equivalent to 2.47SBD in today’s marketcap.
The profits are generated from each service charge fee they render.
Example: I charge N30 (an amount that is equivalent to 1Trx) for every N500 ($1) and N1000 ($2) transactions made by a customer which can be deposit or withdrawal.
Another method that profits are made is through bank commission fee. This amount is paid by bank to an agent either monthly or weekly as a reward for their service. The commission amount depends on the number of transactions within the timeframe.
Service rendered by an agent
Although majority of agents focus on deposits and withdrawal.
There are other services which are;
- Transfer of money
- Payment of utility bills e.g power supply bills
- Quick opening of bank account.
Some POS agent have expand their service to instant swap of crypto currency to fait but this service is very rare because of the banning of cryptocurrency in the country.
Requirement for becoming an agent
Apart from a start-up capital which is usually a minimum of N100,000 (approx 50SBD) and a location, other documents that one have to issue before been authorized by a bank to become an agent.
- A photograph
Some banks may demand for a passport photograph alone while others may demand for one full photograph too. - A verified bank account
- A valid means of identification e.g National passport
- A POS machine
Some banks issue after authorization in an installment payment while others demand instant purchase.
Every banks have additional demands and minimum capital but the listed are the major demands.
Factor to considered before setting up a POS business
Good location: The first thing the location because it controls about 40% of the business success. Ensure that the location is convenient for customers. There are some location that will not be favorable during raining seasons due to flood. As such, be considerate of every season.
Competitors:
Taking a survey on the number of competitors and customers in an environment is very important. After finding out the total number of competitors, check their level of commitment. Doing that will help you monitor their weaknesses and strategize on how to overlap them. However, even if there are competitors, if an environment produces lot of customers as well, its worth an option.
Security:
Life is irreplaceable so security risk is always necessary. A good environment may not be safe for the operation. Remember that you are dealing with fiat currency as such, there’s a high tendency of been rob in a less secured environment. Some environment favors morning service but very risky at evening. In my country, there is a rapid growth of insecurity in major regions. Although, my environment is conducive for POS business from 7am to 9pm. In order to gain a proper information, take a survey and ask responsible dwellers questions. Even if an environment is secured, it is not advisable to hold a big amount of money if you a going to operate with a kiosk or open space.
Basic rules of POS service
Ensure that you receive an alert before issuing a payment to any customer that make transfer.
Always count the money very carefully and check each note in order to confirm if there is a counterfeit.
Ensure that you document all the deposit transactions.
Pros and Cons of POS business
| PROS | CONS |
|---|---|
| Cheap capital | Security risk |
| Stress free | Promote some level of fraud |
| Attractive profits | Bad network |
Conclusion
I have work as a POS agent for some years and I write base on personal experience. It is a lucrative business but must be operate with caution.
Thank for reading my business posts.
About my business
| Business name | LeoMat Venture |
|---|---|
| Service | POS and instant exchange etc |
| Currency | Sbd, steem and Nigeria Naira |
| Manager | @reporter-ann |
| Address | Itu LGA, Akwa Ibom state |
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Hello, thank you very much for all the well-founded information -and raised where more steemians, who want to venture into the world of business, will be delighted with the information provided.
Greetings.
@reporter-ann
In your next publication add the % to the beneficiary account of the (businessactivity), as support for the strengthening. since I do not add 10% but 1.0%
Greetings.
Hello MOD @cindycam
I’m very sorry for the mistake
I know about the 10% beneficiary rules but I mistakenly input 1%
Kindly, pardon my error
Thanks
Have a nice day