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Over the years, the Point of Sale (POS) business has gained significant traction in Nigeria, especially following the 2023 Naira redesign and currency swap initiative. During that period, banks faced severe cash shortages, and the Central Bank of Nigeria (CBN) imposed deadlines for phasing out old Naira notes. It was during this period that POS operators emerged as 'saviors' by facilitating access to cash and enabling transactions when traditional banks were overwhelmed. These POS operators are commonly referred to as "POS agents" and they help in making payment services seamless especially in unbanked areas.
Currently, cashless transactions are becoming the norm as Nigerians prefer digital payments for convenience and safety. POS machines on the other hand have become a constant in shops, markets, and even pharmacies helping with paying for groceries, withdrawing cash and transferring funds. The amazing thing about POS operators is that they are always within reach especially in areas where banks are scarce.
In this article, we would look at the legal requirements for establishing a POS business in Nigeria.
What is a POS Business in Nigeria?
A POS business involves the use of portable electronic machines to facilitate financial transactions such as cash withdrawals, fund transfers, bill payments, and purchases. These machines connect to banking networks and allow customers to access financial services without visiting a bank. There are two main categories of POS usage, namely:
- Merchants- These are businesses that use POS machines to accept payments from customers.
- POS Agents- These are individuals or businesses that offer financial services (withdrawals, transfers, etc.) using POS machines.
Requirements to Become a POS Agent
- Register your business with the Corporate Affairs Commission (CAC).
- Obtain a POS machine from a CBN-licensed Payment Terminal Service Provider (PTSP) or a traditional bank such as First Bank, Guaranty Trust Bank etc.
- Obtain a Tax Identification Number (TIN) from the Federal Inland Revenue Service (FIRS).
- File and remit applicable taxes such as Value Added Tax (VAT) and Income Tax
- A bank account
- Valid means of identification
- Utility bill
- Passport photograph
- Fill the required forms
How Much Does It Cost to Operate as a POS Agent?
The startup cost varies depending on your location, provider, and business scale. Most PTSPs offer POS machines for lease or at subsidized rates. There are also transaction fees which depends on the provider.
Typical POS Agent Charges in Nigeria
All POS agents charge this regardless of the type or brand of machine;
- Withdrawal:
- ₦100–₦5,000 → ₦100
- ₦5,001–₦10,000 → ₦200
- ₦10,001–₦15,000 → ₦300
- Transfer: same as withdrawal fee
1. Airtel SmartCash POS
- Withdrawal:
- ₦100–₦5,000 → ₦100
- ₦5,001–₦10,000 → ₦200
- ₦10,001–₦15,000 → ₦300
- Transfer: same as withdrawal fee
2. Flutterwave POS
- Deposits: 0.6% of amount
- Withdrawals: ₦6 per ₦1,000 (~0.6%)
3. PalmPay POS
- Deposit (by agent): Flat ₦10
- Withdrawal: 0.5% of amount
4. MoMo POS (MTN Mobile Money)
- Withdrawals:
- ₦1,000–₦5,000 → ₦50
- ₦6,000–₦20,000 → ₦100
- ₦20,000–₦500,000 → ₦300
- Deposits follow same tiers
5. OPay POS
- Withdrawal:
- Below ₦20,000 → 0.5%
- Above ₦20,000 → Flat ₦100
- Transfers: ₦50 for transfers of ₦10,000+
Agents may set customer-facing fee above these base rates.
6. Bankly POS
- Withdrawals: 0.3%
- Transfers: ₦35 (flat)
- Deposits: ₦20 per transaction
7. Moniepoint POS
- Withdrawals:
- ₦1–₦20,000 → 0.5%
- Above ₦20,000 → Flat ₦100
- Transfers: ₦20 per transaction
8. Baxi POS
- Withdrawals:
- Below ₦20,000 → 0.55%
- ₦20,000–₦100,000 → ₦100
- Above ₦100,000 → ₦150
- Transfers/Deposits: ₦30 flat; bill payments often free
9. FirstMonie (First Bank POS)
- Withdrawal Tiers:
- ₦1–₦5,000 → ₦50
- ₦5,001–₦30,000 → ₦100
- ₦30,001–₦100,000 → ₦150
- Above ₦100,000 → ₦200
- Bills: ₦100 flat
- Airtime top-up: Free
10. Supply Smart (Fintech Provider)
- Withdrawals: 0.5%, capped at ₦100
- Interbank Transfers: ₦25 per transaction
- POS-to-POS Transfers: ₦15 per transaction
- Bonus: Free data for agents
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.