How to Start a POS Business in Nigeria [Cost & Profit]




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With Nigeria’s recent cashless policy, there’s more demand for point-of-sale (POS) business agents.

The POS machine supports contactless payment for goods, making it a lucrative source of income in our current cashless economy.

Whether you own a small shop or want to make money daily, starting a POS business in Nigeria is a profitable investment. You just need to understand how the business works and if it’s right for you.

This guide explains all you need to know about how to start a POS business in Nigeria and the best POS machine providers.

What Is a POS Business?

A POS business offers customers cash transactions and other types of payments through a point-of-sale machine. These transactions include money transfers, cash deposits, and bill payments.

Businesses use the POS terminal to facilitate electronic payments, allowing customers to pay for products or services online using credit or debit cards. It’s a lucrative business you can start with little capital and earn daily profit.

Is the POS Business Lucrative in Nigeria?

paying with a pos machine

Owning a POS shop is a lucrative business in Nigeria that can fetch you daily income. Banks alone can’t cater to all the financial needs of the country’s large population. This is why POS businesses can thrive and bridge the financial service gap.

POS agents earn mainly from the service charges placed on each customer transaction. Many agents usually charge 2% per transaction (i.e., ₦100 for a cash withdrawal of ₦5,000, ₦200 for withdrawals up to ₦10,000).

On every ₦100 transaction fee, a commission of ₦40 goes to the point-of-sale terminal provider. This fee aligns with the predetermined percentage cut the bank or service provider requires (usually 0.5% of the transaction). The fee also varies, depending on the type of transaction.

The transaction fee charged on each customer transaction after the bank commission becomes your profit. The more transactions your customers make, the more money you earn. 

Also, you can offer other financial services like electricity bill payment, TV bill payment, and airtime top-ups to increase your earnings.

As a POS agent, you can earn up to ₦10,000 daily and lots more monthly. However, your profit potential depends on your hard work and other factors like the pricing strategy, volume of transactions, and good customer relationships.

Owning a POS shop also comes with some risks.

How Much Does it Cost to Start a POS Business in Nigeria?

Starting a POS business in Nigeria doesn’t cost much. You can get a POS machine for ₦8,500 and a starting capital of ₦20,000 to make withdrawals and transfers possible. Some POS companies would require a minimum caution fee of ₦20,000 in your balance. So, the cost of opening a POS business in Nigeria starts at ₦48,500 and up to N250,000.

The overall cost will increase if you want to make your POS business bigger. For instance, you must consider rent, multiple POS machines, and marketing.

Here is a breakdown of the general cost of starting a POS business:

POS Terminal

The cost of purchasing a POS terminal in Nigeria can vary from ₦8,000 to ₦150,000. This price depends on the POS terminal brand and the vendor you patronise. For instance, you can get the Opay Mini POS for ₦8,500.


Another factor determining the overall startup cost is rent. Depending on the type of space you intend to rent out for your business and the location, the price may range from ₦30,000 to ₦150,000 or more. You should also consider renting a space in a busy area so you can access more potential customers.


Depending on your choice of marketing strategy, you can spend between ₦20,000 and ₦100,000. You can also use other marketing methods, including referrals from your returning customers.

Overall, starting a POS business in Nigeria in 2023 costs between ₦38,500 and ₦250,000. However, conducting adequate market research to know what works in your area before starting your business is important.

Also, make sure you have enough minimum working capital to cover the initial expenses of your business for the long term.

Requirements to Open a POS Business in Nigeria

Opening a point-of-sale business in Nigeria is easy. The requirements and know-your-customer (KYC) process offer a low entry barrier for any reputable person to get a machine effortlessly.

Each point-of-sale provider has unique requirements. However, the Central Bank of Nigeria has approved a fundamental structure that they all adhere to. The requirements for opening a POS business in Nigeria include the following:

  1. a valid means of identification (e.g., a national ID card, driver’s licence, international passport, or voter’s card)
  2. bank verification number (BVN)
  3. a business account (or two, in some cases)
  4. a passport photograph or online identity verification.
  5. proof of address (a utility bill not older than three months or a bank statement carrying your home address).

Other requirements for larger businesses include:

  1. Tax Identification Number (TIN)
  2. Evidence of business registration (CAC Certificate)
  3. Credit Bureau Report
  4. A minimum working capital of about N50,000
  5. Two (2) current account references

How can I Start a POS Business in Nigeria? Step-by-Step Guide

A POS business in Nigeria can be a highly profitable business, especially in certain areas where banking services are not easily accessible.

In order to start up a POS business, there are certain steps to follow to achieve success, and these are outlined below:

1. Know the Cost of Starting a POS Business in Your Area

Your first step to starting a POS business will be to know the start-up cost in your area. Will you be renting a store or partnering with someone? Or do you just want a DIY setup (i.e., an umbrella and plastic chair by a roadside)?

Also, you must find out how much it’ll cost to get the machine in your area. Then, you should consider how much transaction capital you want to begin with. Calculate the overall starting capital and write it down.

2. Find a Good Location with High Foot Traffic

Getting a good location with high foot traffic for your POS business is essential to maximising sales. Search for a busy location like the market, university campuses, or busy streets to attract more customers.

3. Get Your Capital Ready

Next, you’ll want to source the funds required to set up the POS business. Let’s say you calculated ₦55,700 as your starting cost. You can use your personal savings to start (highly recommended). Other ways to get your starting capital include getting from family and friends or taking a loan from an online loan app like Palmpay (not recommended).

4. Register as an Agent with a POS Service Provider.

The next step after picking and setting up a good location is getting your POS terminal. The traditional way to get a machine was to visit your bank. However, the process doesn’t benefit small entrepreneurs or business owners with little capital.

Thankfully, you can now register as an agent with a fintech company to get a machine affordably. Some reputable service providers include Opay, Moniepoint, Paga, and Nomba. You can walk up to a reliable POS aggregator or apply to these services online.

5. Get a POS Machine

Once you sign up as an agent, you can request for a POS machine. Depending on the service provider, you can buy a machine outright, get it for free or on a lease.

You can complete the process online or by visiting the provider’s office. Ensure you complete the KYC requirement and minimum starting capital. Once you get your machine, you can start completing transactions and making a profit.

Which Bank is Best for POS Business?

Several Nigerian banks and financial service institutions offer great POS services. Some of these popular banks include Zenith Bank, First Bank, Access Bank, Wema Bank, Guaranty Trust Bank (GTB), and United Bank for Africa (UBA).

However, before choosing any of the commercial banks for your POS services, it is best to compare different options, their features, benefits, and other details that suit your business needs.

Here are some of the points you may need to look at before making a choice about your preferred financial institution:

  • Availability of POS terminals: you should check if your preferred bank has enough POS terminals that your business will need.
  • Transaction fees: it is important to look for a bank that offers competitive transaction charges.
  • Customer support: Choose a bank that offers great customer support and will always be available to assist you with any problems regarding your POS terminal.
  • Ease of integration: Choose a bank that has a POS system that is easy to integrate and has a secured POS system in order to protect the sensitive information of your customers.

Other POS Agent service providers in Nigeria

With the increase in the payment of products and services using online platforms and POS terminals, you don’t necessarily have to go to any commercial banks to get registered. You can approach any of the agent banking service providers and purchase your POS machine. Here are some of the best POS agents in Nigeria:

  • Palmpay
  • OPay
  • Moniepoint
  • Nomba
  • Firstmonie
  • Pay force
  • Quickteller
  • Bankly
  • Paga
  • CLOSA agent
  • Ecobank Xpress point

How to Calculate Profit in a POS Business

To calculate your profit, we need to determine the total amount you earn from transaction fees in a month. Then subtract the cost of using the POS service provider.

Most POS service providers charge around 0.5% per transaction. Let’s say you charge the standard 2% per transaction and complete a total of ₦200,000 worth of financial transactions each month. This comes out to:

2% of ₦200,000 = 0.02 x ₦200,000 = ₦4,000

So, your earnings from transaction fees in a month is ₦4,000.

Your provider takes a 0.5% fee per transaction, which comes out to:

0.5% of ₦200,000 = 0.005 x ₦200,000 = ₦1,000.

So, the cost of using the payment provider in a month is ₦1,000.

To calculate your profit, we subtract the cost of using the payment provider from your earnings from transaction fees:

₦4,000 – ₦1,000 = ₦3,000

Therefore, your profit in a month would be ₦3,000.

Making Your POS Business More Successful in 2023

Starting a POS business in Nigeria is lucrative and among the top businesses to start with ₦50k. The only wahala about opening a POS business is that almost every street corner has more than five POS shops these days.

To increase your chances of launching a successful POS business, make your services more enticing. You can offer a discount on referrals or offer free withdrawals up to ₦1,000.

Having a faster POS machine is also another way to boost your profits. Since the recent cashless policy and shift to online transactions, banks have suffered network issues. So, ensure you register with a POS provider that offers faster transaction speeds. This way, you can get more customers when your competitors suffer downtime.

How to Start a POS Business in Nigeria FAQs

How much does POS cost in Nigeria?

A mini-POS costs around ₦8,500 to get. The average price for standard POS machines with receipt printers is ₦20,000. Other sophisticated machines, like the Android POS machine, can cost up to ₦50,000 in Nigeria.

Can I start a POS business with 100,000?

Yes, it is possible to start a POS business in Nigeria with ₦100,000. Your POS business plan will include getting a machine from Nomba for ₦20,000 (a caution fee). Then, you can get a carpenter to build a kiosk for around ₦40,000. You can use the remaining ₦40,000 as your startup capital.

Can I start a POS business with 50K?

Yes, you can start a POS business with ₦50,000. Assuming you already have a good business location and store, you can get a POS machine from Moniepoint or Opay for ₦20,000. Then, you use the remaining ₦50,000 as your starting capital for facilitating withdrawals.

Can I start POS business with 20K?

You can’t start a POS business with 20K. Even if you get a mini-POS of N8,500, the minimum balance you must maintain alone is N20,000. However, you can use the 20k to support other important parts of your POS business.

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