If you are looking for information on how to start a POS business in Nigeria, you are in the right place. Starting a point of sale (POS) business in Nigeria can be a lucrative venture, as more people are embracing electronic payments. Recently the POS business became a hotcake due to CBN cash withdrawal policies and the new Naira redesign. Irrespective of government policies in the foreseeable future POS business is here to stay considering that we still have a large percentage of unbanked people in Nigeria. As of 2021, the World Bank reports that there is still a higher percentage of Nigerian adults who are still unbanked. This still means that a significant portion of the Nigerian population, about 38 million adults, lack access to formal financial services.

What is covered in this page
How to start a POS business in Nigeria
Starting a point of sale (POS) business in Nigeria can be a profitable venture, but like every other business it requires careful planning and execution to succeed. We would guide you through the basic process you should undertake before you start a POS business in Nigeria.
Conduct market research
Conducting market research is essential to understanding the potential demand for POS services in the area you plan to operate. This will help you identify your target audience, competition, and assess their strengths and weaknesses. Before you start a POS business in any location your should look at for the following things:
- Is it an Urban or Rural environment?
Urban areas have more population and give the best opportunity for more transactions unlike rural areas. However, the cost of running the business might be lower in rural settings.
- Is there a large amount of foot traffic in the area?
Starting a POS business in a market, university off and on campus, or around other high traffic areas would give you access to get a larger inflow of transactions. This is because the success of a POS business lies in the volume of transactions you carry out on a daily basis.
- How many POS businesses are already in the area?
Knowing the amount of similar businesses and the amount of traffic would guide you to estimate the number of transactions you would make. The more the number of already existing POS businesses the lesser the number of transactions or market share you would have. The sweet spot is to discover an area with few existing businesses and a larger human traffic.
- Is the area secured and have access to stable internet?
Some of the challenges of the POS business in Nigeria are stable internet and security. This is a very vital aspect to consider so that you don’t lose your investment.
- Can I increase the value for my customer?
Any business with better strategies and increased value for customers would always find a way to win and be successful. What incentives can you introduce to your customers that other POS businesses are not doing? How can you get loyalty from anyone who transacts with you to keep coming back to you whenever they want to carry out a transaction especially when you have other businesses in your region. In some sense it boils down to customer service and the experience that people get when they do business with you and in another sense it has to do with the strategies you develop to set you apart from competitors.
Obtain necessary permits and licences:
The easiest way to start a POS business in Nigeria is to work with a bank or a fintech partner. Most of them have a registration process you have to go through and we covered all the process and fees from the major banks and fintech partners in another article. POS business in Nigeria: A complete guide on everything you need. To operate a professionally structured POS business in Nigeria, it is usually advisable that you go through proper business registration, tax identification number, and other relevant permits. The cost of registration with CAC will vary depending on the type of business structure you choose, but it can range from ₦20,000 to ₦60,000.
Choose a location
Selecting a strategic location for your POS business is crucial to its success. Consider factors such as foot traffic, proximity to banks and other financial institutions, and security. The cost of renting a suitable location will vary depending on your location and the size of the space.
Purchase necessary equipment
You will need to purchase a reliable POS machine, a generator or alternative power source, and other necessary equipment to run your business smoothly. The cost of purchasing a POS machine will depend on the brand and model, but it can range from ₦50,000 to ₦150,000. A generator or alternative power source can cost between ₦80,000 to ₦150,000. Personally I would prefer a solar option for power, as this would reduce your cost of running the business. Other equipment costs such as furniture and office supplies will depend on the size and style of your office, but it can range from ₦50,000 to ₦100,000. Depending on your budget there are affordable options you can explore to reduce the cost of setting up the business.
Establish partnerships with financial institutions:
Partnering with banks and other financial institutions is essential to enable customers to use their debit and credit cards for transactions. This will require setting up a merchant account with each institution. The cost of setting up a merchant account will vary depending on the institution, but it can range from ₦20,000 to ₦100,000. We covered all the process and fees from the major banks and fintech partners in another article. POS business in Nigeria: A complete guide on everything you need.
Hire and train staff
Hiring reliable and trustworthy staff and providing them with adequate training is crucial to the success of your POS business. The cost of hiring staff will depend on their skill level and experience, but it can range from ₦100,000 to ₦300,000 per year.
Develop a marketing strategy:
Developing a marketing strategy to create awareness about your business is important. This may include creating a website, social media marketing, and traditional advertising methods such as flyers and posters. The cost of marketing will depend on the scope and channels used, but it can range from ₦50,000 to ₦200,000.
Provide excellent customer service:
Providing excellent customer service is crucial to encourage customer loyalty and repeat business. This may involve hiring a customer service representative or training your staff on customer service skills.
Monitor and evaluate performance:
Regularly monitoring and evaluating the performance of your business will help you identify areas for improvement and make necessary adjustments to increase profitability. The cost of performance monitoring will depend on the tools and methods used
Final Thoughts
It is also important to keep up with the evolving regulatory landscape in Nigeria and ensure compliance with relevant laws and regulations governing the operation of a POS business in the country. This includes obtaining approval from the Central Bank of Nigeria (CBN) to deploy POS terminals and adhering to the rules and guidelines set by the Nigerian Communications Commission (NCC) and other relevant agencies. Overall, starting a POS business in Nigeria can be a profitable and rewarding venture with the potential to contribute to financial inclusion in the country. By following the necessary steps and guidelines, you can establish a successful and sustainable POS business that meets the needs of your customers and contributes to the growth of the Nigerian economy.