How to start POS business

The point-of-sale (POS) company is a money-making venture that has been operating quietly for some time but is now gaining traction. This is due to an increase in the number of consumers who are spreading the word to those who seek a convenient and easy existence.If you’ve ever gone to an ATM post and waited in line in the scorching heat or during a rainstorm, you should know that this company will prosper any day, any time.

People now have a viable alternative to bank cash withdrawal and transfer via pos. Opening an account and registering for a BVN

Pos is a tremendously profitable business. It is a well-known truth that money trading or other money-related ventures are extremely profitable. This is a firm that has the potential to employ thousands of people, particularly young people. That is why this post is appearing in order to urge individuals to enter this profitable industry.

HOW TO BEGIN A POS BUSINESS

If you’ve been seeking for a way to make money through POS or want to start a MOBILE ATM CASH BANKING business in Nigeria, now is your chance. This post includes a full step-by-step guide.

POS machines are currently being used by a large number of small businesses for their transactions. Shops, supermarkets, hair salons, boutiques, and so forth are examples.

1. Acquire A SHOP

You must get a store; this is critical since as a business, you must have a location to operate from. One advantage of the Pos business is that it does not require a vast space; a modest space is sufficient. You can either rent it or use your home for the transaction.

If you operate a shop, you must develop your customer base because it will provide you an edge when applying for a POS machine from a bank.

2. THE LOCATION

The location of your pos business is critical because an increase in patrons implies an increase in profit. It should be visible and easily accessible. Decorate your shop with banners and materials provided by your pos mobile agents. Make sure everyone knows what your shop is all about.

3. CAPITAL

You’ll need about #50,000 on hand for withdrawal payments as well as money for incidental expenses like point-of-sale purchases if necessary. Renting a shop is another item you’ll need money for.

4. GET THE POS MACHINE

There are two ways to obtain a pos machine:

Bank and the Agency

WHAT EXACTLY IS POS?

POS (point of sale), sometimes known as point of purchase (POP), is a device that allows local debit cardholders to pay for products and services, typically in a retail setting.

Pos machine is a very good automated product because it reduces the stress of carrying cash around, transacting directly with cash etc.  It also gives instant notification/confirmation of goods and services payment. That is why you receive alert whenever you do cash withdrawal or transfer with pos agent. Pos business has its many challenges and  Problems which you must know before going into the business.

POS accepts debit/credit cards the same way ATM does. Buyers of goods can pay directly to a sellers account without using cash.
It is not just for payment only but can be customized for bill payment such as airtime (recharge card printing), DSTV, GOTV,. POS can also be customized to collect School fees, rent, tax, donations etc.

CRITERIA FOR OBTAINING A POS MACHINE 

  • Have a sales point
  • Possess a registered business name
  • A passport photograph
  • Get it on lease or pay cash

HOW TO GET POS FROM BANKS

  • Have a business name
  • Account number
  • Business email address
  • Phone numbers
  • And some other small details.

You will be directed to the account officer.  Who will start processing the documents within 72 hours. Under 14 days you will receive the POS. But you will be required to sign a POS agreement document with the bank.

PURCHASE POS MACHINE WITH A CBN LICENSED PTSP

If you do not wish to collect the POS machine from the bank, you can buy it from a company that is authorized to sell them. They are a registered aggregator with a CBN certified PTSP (pos terminal issuers in Nigeria). You stand to benefit greatly from owning your own POS equipment.

POS MACHINE COST

The cost of a point of sale machine varies depending on the agency firm from which you purchase it and the sort of point of sale system in question.

The prices of the machines are decreasing from what they were previously. We now have devices that cost N45,000, N65,000, N75,000, and so on. The difference here is similar to having 2G, 3G, and 4G, therefore the more money you have, the better the service.

THE BANKS TO GET THE POS MACHINES ARE:

  • Zenith Bank,
  • First Bank,
  • Access Bank,
  • Ecobank,
  • Skye Bank,
  • Fidelity 
  • Diamond bank etc. Each bank has its own mode of operation you just have to go to them one on one to get details on what is required.

Banks give out the POS machines free. I mean you don’t have to pay anything, however, terms and conditions apply. For instance, some banks can only give you when your customer base is from 1,000 and above. Another condition is if  you can sale your products up to one million Naira a day. Banks charge you certain percentage for every transaction you perform.

OTHER PLACES TO GET POS MACHINE

Micro Finance bank: some microfinance banks like Fortis Mobile gives out pos machines. But you have to register as agent mobile money company.

INTERSWITCH: Interswitch is instant debit and credit but it does not accept visa cards for now.

There are many mobile money operators example; Quickteller, Paga, Branpos, Pocketmonie, Firstmonie, Opay, Paycentre, Nexgo Pos, citiserve etc. 

COMMISSION FROM DIFFERENT AGENCIES

AGENCY BANKING SERVICES AND COMMISSION

Before now it used to be:

  • Cash withdrawal – #150
  • Cash deposits #150
  • Transfers – #150
  • The #150 commission you make on every transaction is the same for all banks. 

It is now 1% deduction across board on every transaction, the fee is 0.75% while Maximum Charge on Pos (CAP) that used to be #2,000 is now #1,200.

NOTE: Commission can be changed at anytime find out the current charges from your agent or bank.

FOR RECHARGE CARD PRINTING

  • Etisalat 3.5%
  • MTN 3.0%
  • AIRTEL 4.0%
  • Globacom 6.0%

FOR DATA BUNDLES

  • MTN 3%
    Globacom 4%
    Etisalat 4.5%
    Airtel 4%
    Smile 3%
    Spectranet 4%

FOR BILL PAYMENT

  • DSTV 2%
  • TSTV 2%
  • GOTV 2%
  • PHCH 2%
  • STARTIMES 2%
  • Same goes to any other company used.

PREPAID VOUCHER

  • WAEC 6%
  • NECO 6%
  • JAMB 6%

WHERE TO ESTABLISH POS BUSINESS

Rural Communities: you will agree with me that rural communities have less number of banks or financial institutions as such establishing a POS business will be a great success. Many parents that want to send money to their kids for school fees, upkeep and other commitments will gladly embrace this business. Others who travel downtown to carry out financial transaction will be relief.

Places Where ATM are always crowded or in places where there are shortages of banks/ATM post. Human beings are always in a hurry as such not everyone likes queuing up in ATM post if they see alternative they will gladly accept not minding the charges.

I discovered that the business thrives well close to markets and banks. Sometimes bank ATM will show insufficient fund at that time many people who wants to make use of money will rush you.

In your business premises especially if you handle a large amount of money or have a good number of clients.

HOW TO SUCCEED IN POS BUSINESS

  1. Do not collect high charges. You can put #300 for a ten thousand Naira transaction that is 3% on every monetary transaction.
    Always be available at all cost in your location because if you keep absenting yourself clients will think that you are not serious.
  2. since it involves money you have to position it in a place that is safe. So that hoodlums will not use you shine by robbing you.
  3. Don’t accept large amounts for security reasons except you are well secured because if some bad guys know that you handle large amount, they may strike.

THE DIFFERENCE BETWEEN GETTING FREE POS MACHINE AND PURCHASING YOUR OWN

It is more ideal for you to buy your own pos machine than get the free version. When they say free it is not completely free because you will still part with some money to get the pos. It is called mpos so it is not a machine per say but something you can sync into your phone.

FREE MPOS

To get free pos machine there are many conditions that follows.

  1. You must prove that your business can do a #100,000 transaction every day. It is mostly given to people who are already into or have done agency banking before and live in a high brow traffic areas.
  2. The money you pay for registration #15,000 or more is enough to add more money and buy for yourself. They call it agent registration and it is compulsory.
  3. You are the one to pay transportation fare for physical visitation of your location or the address where terminal will be used. And also for branding materials, courier for the pos delivery. Let’s assume the whole of these cost #20,000. Add this to the registration fee what does that tell you?
  4. It takes 30 days before you get the free mobile pos and you have to sync it into your smart phone before you can transact with it.
  5. As an agent you will not charge extra for utility bill, airtime recharge but only from the commission you charge user

REGULAR POS (ONLY FOR PURCHASE)

  • It works independently without smart phone. You get instant value of amount transacted into your wallet. From your wallet you make transfer to your bank.
  • You get your pos machine within 3 working days after payment.
  • No target
  • You earn extra commission on cable TV, utility bills, airtime recharge. Also you earn from the commission you charge users.

CHALLENGES OF POS BUSINESS

  1. Power or source of light. Some rural communities don’t have steady light while others don’t have it at all.  So you will have to spend more on fuel to power your generator after purchasing one. In other to keep your business running and your customers smiling. The business involves the use of a machine and has to be powered every time.
  2. Network issues: a friend of mine told me how she got to one school; about commencing transactions there was no network. She battled for a while at the end she excused herself. And told the proprietress that she will be back when the network comes up. Anyway, there is a way you can use your phone to do the business so you can avoid embarrassment. I mean alongside with the machine
  3. Some people say phone transfer is better than pos but big Companies with many staff needs pos. Phone transfer is risky and very frustrating. Network is the major challenge. Some alerts take hours to come and sometimes you get a reversal of the money a customer has already confirmed you posted.
  4. Theft/robbery: it involves money-making, there is the fear of possible attack because you are exposed to it. To keep security means spending money.
  5. Inability to control the crowd that gathers around you.

HOW PROFITABLE IS POS BUSINESS IN NIGERIA

  • There is good profit in POS business because it involves rendering many services. With pos you can print and sell recharge cards. Only this one alone provides heavy gain not to talk of when you calculate other services rendered in a day.
  • The money you make from commissions; banks and cable is enough to make you financially free. The bank charges you receive is not directly from you but your customers. So you have nothing to lose but much to gain. But you have to charge according to bank commission or it should guide your charges.
  • Assuming you transacted with 40 people a day and your commission is #150 each that will give you #6,000. In a month you would have made #150,000 it could be more. Remember there are other services like recharge card sales, cable and Education voucher sales to make money from.

WHY YOU SHOULD START POS BUSINESS

  1. As said it is lucrative. The demand for all the services is high meaning plenty overturn for you which guarantees a huge profit.
  2. It is not a complex business, the processes involved are straightforward. Meaning the business can be done by anybody.
  3. You would have rendered help to people who spend so much money and time to get to where they can receive such services
  4. The demand for the service is high meaning more money
  5. It is sustainable because the consumption of these services will always be needed
  6. POS business is not yet crowded

HOW MUCH IS NEEDED TO START POS BUSINESS

It is determined by the services you wish to provide and the type of position you wish to obtain. If you get it via a bank, you’ll need at least #100,000 for the transaction. That’s the view from outside the shop.

However, if you are purchasing via an agency, you will need N300,000. So #100,000 will be used to maintain the POS machine, while #200,000 will be used to pay for withdrawals.

Remember that transfers require cash in your bank account.

You can begin small, and as the demand for your services grows, you may expand your capital capacity. For those who collected the machines from banks and are using it for their business transactions such as supermarkets, they have nothing to pay but meet-up with laid down procedures.

MARKETABILITY

The business sales itself, create awareness or let people know your business. Next time they will be the ones coming to do business with you.
You can approach institutions, religious bodies, market etc and make a deal with them.

Print fliers and share them around your neighbourhood.

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