If you looking to start a POS business in your locality! This article contains all the information you need to fully set up as a bank agent.
pos biz: step by step guid to, how to use 200k capital to start a pos business in nigeria & earn big monthly
POS business It is also called agent banking business, and it’s an extension of the services offered by financial institutions to enable easy service offering to a wide range of customers. is a legitimate way to make money in Nigeria. It’s more profitable in communities with no banks and places where ATMs are not enough to serve the financial needs of the community.
POS (Point of Sale) business offers services like funds transfer and withdrawal, sales of airtime, bill payments like GOTV, DSTV, Startimes, PHCN, and other utility bills. It is used in several places where goods and services are sold/rendered; places like retail shops, offices, supermarkets, fuel/gas stations, pharmacies, eateries, etc.
By creating easy access for financial transactions in different localities, the POS business has given individuals and business owners additional means of income. They are sometimes called bank agents.
Although not serving as direct employees of a bank, they deliver banking services on behalf of banks on an agreed commission. It is a profitable business and one of the best means of getting passive income.
Basically, the POS business also known as agent banking began in 2013, after the Central Bank of Nigeria released its guideline on the operations and management of the business. Since then, it has remained one of the retail channels of several commercial banks to make their banking services reach a large number of people.
A banking agent owns and operates a retail outlet. He/she conducts the financial transaction and allows clients to deposit, withdraw, transfer funds, pay bills, recharge airtime, inquire customer’s account balance, and other related services.
It thrives more in rural areas, semi-urban centers, the unbanked and underbanked communities. It is similar to any other remote banking channel. The banks equip the agents with point-of-sale (POS) card reader, mobile phone, barcode scanner, personal identification number (PIN) pads, personal computer, etc. They are third party agents and can be an agent to as many banks as they can serve.
If you have an existing small business that brings in cash on a daily basis, you can diversify your revenue streams by venturing into the POS business.
How To Start POS Business In Nigeria
As I have earlier stated, the POS business thrives more in rural areas or semi-urban centers; in places where there are no banks, or few ATMs to serve the people. Hence, if you intend to venture into this business, the first thing is to be sure that the number of banks in your location cannot serve the community. This way, you are of making a profit.
In this article, I have highlighted step by step plan on how to start a POS business in Nigeria and the basic things you need to get started.
Step 1: Have An Existing Business
The POS business has to do with finance and must, therefore, be approached carefully. Besides, the Central Bank of Nigeria is very particular about the business entities that qualify to be agents. So, extra care is taken by commercial banks before they authorise an agent for their retail banking.
To be eligible, you must have an existing business in operation at least for a period of 12 months. Also, you must have a shop or office from which you operate. Then, you must have been registered with the Corporate Affairs Commission as any of the following entities;
Limited Liability Company
Trusts or any other entity aside faith-based or NGOs.
As long as you have any of the above requirement, doing a POS business or serving as a bank agent is possible.
Step 2: Approach A Bank
Virtually all Nigerian banks allow agent banking services. So, as soon as you decide on the bank of your choice, the next thing is to approach the bank and get the details of their requirement. The CBN guide allows being an agent for as many banks as you can serve.
You will need to fill some documents/agreement forms on the transaction conditions. Then, the bank reviews the application in line with CBN, internal criteria, and enters into an agreement with you, if you meet all criteria.
Also, you must have an account for a direct deposit for the purpose of the business and provide some documents as part of the requirements for the proposal.
Some of the required documents include;
Valid means of identification e.g Driver’s license, National ID card, International passport or voter’s card.
2 passport photographs
2 current account references
Evidence of business registration (CAC Certificate)
Tax Identification Number (TIN)
Memorandum and Article of Association.
Credit Bureau Report
A minimum working capital of N50,000
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Step 3: Get The Equipment
Once your application to the bank has been considered, the bank then supplies the needed tools and equipment for the business. Aside from the mobile phone, the following materials are usually supplied by the bank:
Point of Sale Terminal; a portable device that facilitates payments of goods and services at bank agent locations using payment cards.
Barcode scanner to scan bills for bill payment transactions
Personal identification number (PIN) etc.
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Step 4: Location
For you to thrive in the business, it’s advisable to choose a location with limited banks or places with few ATMs. Also, choose strategic locations like the bus stop, public market, event centers, etc. All of these factors will have much effect on your daily profit.
Once you have a good location, either construct a shed or shop but create enough spaces for swift movement for you and the customers. Have a banner displayed at the entrance to show the retail banking services you offer.
Then, for security measures, you can have a special purse/pouch around your neck or a safe with a strong lock to prevent theft and burglary.
Also, if you notice that an ATM is not dispensing cash, you can go there to advertise your service. Some people there in need of cash might subscribe to your service.
Step 5: Render Services
The business is rendered through the use of POS terminals, card readers, mobile phones, and bank linked mobile wallets for real-time transaction processing.
As soon as you have these, the next step is to start providing the following services;
Cash deposit and withdrawal
Funds transfer services (local money value transfer)
Bill payment (taxes, utilities, tenement rates, subscriptions, e.t.c)
Generation and issuance of mini statement
Cash disbursement and cash repayment of loans
Agent mobile payments/banking services
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How It Works
In a POS business, the client first request transaction like withdrawal, transfer, or bill payment and presents the debit card. Next, the agent selects the type of transaction on the POS terminal device and enters the amounts, then, insert the debit card into the device and ask the client to secretly enter the four-digit pin. Using the network, the General Packet Radio Service (GPRS) connects with the bank’s server to authorize the transaction. When successful, it immediately prints out the receipt.
This process can be repeated for as many customers as you can, as long as you abide by the transaction rules of your host (bank).
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The Importance Of POS Business
With a POS business, banks now reach a larger demographic. Also, they offer more flexible and convenient access to existing and new customers. In addition, they ensure the safety of customers and help reduce traveling long distances to have access to banking. Most importantly, it plays a big role in boosting financial inclusion especially to people in rural areas.
Also, the business has provided job opportunities and financial stability by helping the agent make money in the following ways;
Commission; Banks pay agents commission based on the volume of transactions carried out on their behalf.
Service Charges; By rendering service to customers, you can also charge them a particular amount especially on bills payments, taxes, and subscriptions.
Float; Depending on your cash management policy, you can also make use of cash deposits, net of withdrawal for your primary business.
By operating this business, you are not only increasing your stream of income, but you are also serving the needs of the people in your community.
A POS business is an additional way of getting income. Aside from your existing business, it is a way to expand service offerings and one of the best methods to cross-sell your products/services to walk-in customers.
The business needs to situated in places where there are no bank branches or busy environments with enough security measures in place. You are sure to increase your daily revenue if you get everything right.
Are you considering this business or are you already a banking agent? We would like to hear your thoughts in the comment. Please share this content with your audience if you found it useful.