Point on Sale (POS) service business is becoming a popular business in Nigeria. Since the introduction of cashless policy in 2012 by the Central Bank of Nigeria (CBN), small businesses and banks understood the importance of such policy and the benefits it offers not just for their business and financial safety, but the convenience it offers to customers who can now shop without fear of how much is in their pocket as long as they have their debit cards.
Some people have opened POS service business in different areas where banking services are not accessible. They make money by collecting a certain amount of money from customers in every transaction they made for the customer. For example, a typical POS service center charges N200 for every N5000 cash withdrawal you made with your debit card using their POS machine. The same amount goes for cash deposits. N400 for N10,000, N500 for N15,000, and so on. However, the price seems different for cash transfer (payment of bills e.g.: NEPA bill, Waste bill, etc.), it appears to be lesser than other charges. For instance, a typical POS service charges N100 to transfer N5000 or even less. In terms of profits, a busy POS service business center could be making up to N5000 to N10000 per day as profit. While less busy ones could be making about N2000 to N4000 per day.
This service has made life easier to those living far away from banks, those in rural areas, and busy people who will not like the stress of going to queue up in line in front of the bank waiting for their own time to make a withdrawal from the ATM machines in the bank premises.
Point on Sale (POS) service is one of the major businesses in Nigeria that someone can easily set up with little money. With as low as N100,000 balance in your bank account, you can start a POS service. However, you need to make a small wooden stand with shelter as your office. This option may not be necessary if you are in a public motor park, school campus, student hostel, or company premises, etc. the reason is that you can see a place to just position a table and chair with your POS machine for the business. In that case, you will need only a plastic table and two plastic chairs.
By calculation, you may not spend up to N50,000 for setup costs. A plastic table = N3000, Two plastic chairs = N4000, a POS machine (free from your bank). In case you are going to stay in the streets, markets, or expressways, etc. you may need to build a small wooden office that has a counter to attend to the customers that would cost you about N30,000 in that case you may not need the plastic chairs and table. Alternatively, you can buy a big umbrella telecommunication business umbrella, telecommunication business plastic table, and two plastic chairs the items will still not be up to N35,000.
Based on the calculated expenses so far, your overall capital to start and run this business may not exceed N150,000.
THE CURRENT PRICE OF A POS MACHINE IN NIGERIA
POS machine can be obtained from your bank without any payment provided you have the requirements the bank needs to issue it to you such as good account balance, current account, and lots more. These requirements enable your bank to issue the POS machine to you to start your POS machine.
Some banks even give the POS machine to savings account holders and offer little requirements for those intending to start a POS service, such banks could be a good option for you. Please note that the bank will charge your account a certain percentage of money for each POS transaction you will carry out because of the POS machine. If you do not want the bank to charge you in every transaction you make, you will need to purchase your own POS machine from an independent source.
There are many companies within Lagos, Port Harcourt, Onitsha, Abuja, and Kano that sell POS machine. The price of the POS machine depends on the Brand name, the features, Size, and location of the dealer. Those in Lagos seems to sell cheaper than others. Below are some of the POS machine dealers in Lagos:
Neo Hitech Solutions Ltd
Address: 62B, Opebi Road, Opebi, Ikeja, Lagos, Nigeria
Address: 368, Ikorodu Road, Maryland, Ikeja, Lagos, Nigeria
Address: 36B, 2nd Floor, Toyin Street, Toyin street, Ikeja, Lagos, Nigeria
Address: E10/01, Arena Shopping Complex, Bolade, Oshodi Isolo, Lagos, Nigeria
Address: 2, CMD road, Ikosi ketu, Magodo Kosofe, Lagos, Nigeria
Boromax Global Limited
Address: 12, Simbiat Abiola Way, Computer Village, Ikeja, Lagos, Nigeria
Address: 5, Mojisola Street, Ifako-Agege, Ifako Ijaiye, Lagos, Nigeria
Address: 5, Medical Road, Adjacent Computer Village, Ikeja, Lagos, Nigeria
ICT and I
Address: Suite 4, 21, Opebi Road, Ikeja Lagos
The size of your business
The size of your POS business has to do with the number of customers you need to attend to per hour or per day. The larger the number, the bigger your POS business needs to become. This will in return determine the type of POS machine you need to buy. There are various types available, some were made to handle multiple transactions and are faster than others. The same will also determine the price or the cost of acquiring such POS Machine.
The type of customers you will be attending will determine the type of POS machine you need to buy. Market women seem to have low patronage to POS service because the majority of them do not use debit cards. If you are in such an environment your patronage may be low, hence buying cheaper and smaller POS machines could save you money. If you are within any high institution like a collage of Education, Polytechnic, or University Campus, you can expect high patronage since students in tertiary schools have the highest rate in patronizing POS service because 99.9 percent of them have a debit card.
You must consider the option to choose when making your purchase, you can decide to purchase from the bank by accepting to pay at every transaction you made in the business. This option will be preferable if your capital is not enough to acquire a POS machine from an independent dealer. However, if you have enough cash, you can make a one-time payment to an independent dealer and get a POS machine that permanently belongs to you and will not be having any transaction fees charged by the bank.
Electric Power availability
POS machine uses rechargeable batteries as an electric power source, you must consider the availability of electric power supply within your locality before determining which one to buy. Buying the one with long-time battery discharge will be suitable if you don’t have an electric power generator, no reliable public power supply, or a reliable electric generator power source around your locality.
POS machine needs its network availability to function. You need to consider the location to ensure it has enough network that can enable the POS machine to function effectively. If you choose a poor network area, you are likely to lose customers along the line.
Mode of Payment
Some POS machine can process any type of payment card and can be programmed for new payment methods while some can only process specific cards such as verve card, visa card, and MasterCard. If you are going to operate in a classic environment, you opt for multiple or versatile POS machines that can satisfy your customers.
WHAT IS NEXT?
Assuming you have bought the table and chairs, the shelter, or big umbrella, the next thing is to make a simple flex banner that indicates your business name and the service you are providing. This is a very simple way of attracting customers because the banner will direct people from afar to your small shop or office. You can make the banner two sides and hang it or place it in a very visible location that points to your shop. Once that is done, you are set to commence your POS service business. I wish you good luck!