Have you ever thought about starting a POS business and wondering how to start? In this blog post, you’ll get the right information you need. You might have noticed how POS kiosks have been popping up in different areas lately. It is because of the ease and convenience it brings in helping people make transactions without cash and facing the long queues in banks. More than ever, the POS business is now popular in Nigeria with the ever-increasing demand for easy and accessible financial services by everyone.
What is a POS business?
The Point of Sale (POS) business provides simple financial services through a POS machine. From cash withdrawals to deposits and bill payments, it essentially brings banks closer to people. POS businesses help other businesses to make financial transactions seamless for them and their customers.
Why start a POS business in Nigeria?
POS business is a fantastic way to earn especially in areas or locations with sparse banks that are distant from where there are many people. Once you can secure a good location, your POS business will be in high demand.
A step-by-step guide on how to start your POS business in Nigeria
Step 1: Prepare for registration
Here are things you should keep handy for the registration and establishment of your POS business:
- An acceptable means of identification. For example, your national ID card or passport
- Clear and recent passport photographs
- Your Bank Verification Number (BVN)
- At least 2 references for financial credibility
- A POS machine
- A physical location like a shop or kiosk
- Capital to start and keep the business running
Step 2: Financial plans
You’ll need capital for your business including the POS machine, rent, and working capital. You need to have a budget to estimate your startup cost. You can start your own POS business with as low as #50,000. Doing this will prevent financial pitfalls or blockades to establishing your POS business. If you need capital for your business, Moni makes business loans available for small and medium-sized enterprises (SMEs). Click here to access a business loan from Moni in just 5 minutes.
Step 3: Choose the right location
For your POS business to thrive, pick a suitable location where people are always on the go. Think of markets, school areas, shopping malls, and the like. The goal is to be where people constantly move through. Places with limited banks have a high tendency for increased Patronage. Do not forget to make your shop or kiosk inviting and attractive to customers.
Step 4: Get your POS machine
The next thing to do is get a POS machine which will be the major equipment for your business operations. POS machines vary in price due to factors like brand or special features. You can get a POS machine as low as ten thousand naira and as high as fifty and hundred thousand naira. Some POS service providers offer free POS machines to their customers while some others have different price ranges to accommodate many. Choose the option that suits you and is within your budget.
Step 5: Choose a POS service provider and register
The next step is to register with a legal and recognized POS service provider like Moni. You need to put together the necessary documents you would need for a successful application.
What to consider before starting your POS business
Marketing your POS business
To attract customers and grow your POS business, you need to market your business with effective marketing strategies such as:
- Prioritize customer care service: ensure you provide optimal and top-notch services to your customers. This will ultimately result in a high retention rate apart from increased profits.
- Business location: yes, the choice of your business location matters a lot. Choose high-traffic areas with a lot of people. This will result in increased visibility and higher patronage.
- Relationship with banks and financial institutions: build connections with banks and other financial institutions and establish a good relationship with them. This will bring better service and smoother operations for your business.
Challenges POS businesses face in Nigeria
Running a POS business in Nigeria is profitable but has challenges or setbacks. Here are some common challenges you might face running a POS business in Nigeria:
- Technical issues: technical problems like poor networks can prevent smooth transactions and reduce customer satisfaction. It is advisable to consider a location with a strong network connection while planning to establish your POS business.
- High competition rate: POS businesses in Nigeria tend to have a high competition rate and to stand out among competitors, you need to deploy creative marketing and business strategies.
To overcome these challenges, carefully plan your business, invest in adequate security measures, and be up to date with market trends and strategies to be above your competitors.
Starting a POS business in Nigeria is a great business idea that will thrive with the right planning, location, and customer service. At Moni, one of our goals is to financially empower mobile money agents and we’d love to help you start your POS business. Click here to learn more.
